In response to the COVID-19 crisis, several rules and regulations regarding consumer bankruptcy have been temporarily altered under the CARES act up through March 27, 2021. In the case of current bankruptcy cases, one such alteration allows for debtors who currently have a chapter 13 repayment plan to extend their plan to up to seven years rather than just five years. This allows the debtor to reduce their monthly payments and gain some breathing room in case of financial hardship due to the impact of COVID-19. Most notably for those who are concerned about filing for bankruptcy, any stimulus checks or related government payments in response to COVID-19 will not be considered as monthly income for those who wish to file under chapter 7 and such payments will not be considered as disposable income for those who wish to file under chapter 13. These changes will not impact the eligibility for debtors interested in filing either chapter 7 or chapter 13 bankruptcies.
To better understand if filing for bankruptcy is the right action for you, it is recommended to set up a consultation with a local bankruptcy attorney.
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