Bankruptcy During Covid-19

Published on May 20, 2020 by J. Andrew Meyer

Bankruptcy During Covid-19

The ongoing coronavirus pandemic has already had a dramatic impact on the health and finances of the American public. Even major United States corporations have filed for bankruptcy protection as local and federal governments have shut down all non-essential employers. The courts and the entire legal system have also felt the strain. While this article will help detail how Covid-19 is affecting Bankruptcy law and cases during this difficult time, it is always best to consult a bankruptcy attorney, or the local bankruptcy court for any changes specific to your jurisdiction.

Court Closures Stall Bankruptcy Cases

Loss of income and employment has affected millions of hard working Americans in a way that could make filing for bankruptcy the best option for many. If you are considering filing for bankruptcy during this time, there are a few important changes in the filing process to be aware of. As many public government buildings are still closed, some courts are only allowing online filings to be done. In those cases, anyone who wishes to file a bankruptcy petition will need to do so online through the court’s website or online portal. Some courts are also now allowing virtual hearings and virtual execution of legal documents to help lessen the chance of spreading the virus.

Many bankruptcy petitions that were filed before the pandemic have either been continued to a later date or have been conducted by phone or video. Each court is different, so it’s important to contact a bankruptcy attorney or local bankruptcy court clerk to see how your case is being affected. In the event that your local court is open during covid-19, it is probably setting limits on how many people are permitted to enter the building. Long lines to enter are not uncommon. Similarly, many courts have required all court personnel and the general public to wear face masks while in the building.

CARES Act Effect On Repayment Plans In Bankruptcy

Unless you have received notice from your attorney or the court stating otherwise, monthly payments under Chapter 13 should still be made during this time. However, the Coronavirus Aid, Relief, and Economic Security Act (CARES) has made some important changes to modifying an existing Chapter 13 repayment plan. Specifically, the CARES act allows for modification of an existing payment plan due to financial hardship directly or indirectly caused by the Coronavirus Pandemic.

Further, the Act permits extending a repayment plan to seven years from the start of the first payment. All modifications must be requested by the debtor and ultimately will need to be approved by the bankruptcy court. Lastly, the Act does not allow any money paid by the government in response to the pandemic (stimulus checks) to count as current monthly income for the purposes of bankruptcy.

Florida Bankruptcy Attorneys

With seemingly a second wave of the coronavirus among us, and no official decision by the government on additional relief, more Americans may face the difficult decision of filing for bankruptcy during this trying time. It is important to consult with a skilled and knowledgeable bankruptcy attorney to determine if bankruptcy is right for you.

The attorneys and staff of The Bankruptcy Team have decades of combined experience helping clients with mortgage modifications, foreclosure defense and bankruptcy alternatives to effectively resolve their financial problems. If you are dealing with an unmanageable debt situation and are contemplating bankruptcy, reach out to The Bankruptcy Team to consult with one of our bankruptcy attorneys today.

J. Andrew Meyer

Andrew Meyer was born in Deland, Florida, in 1970. He graduated with an International Baccalaureate Degree from St. Petersburg High School in 1988, and attended the University of Florida, graduating in 1991 with a degree in Economics awarded with High Honors. Mr. Meyer also attended law school at the University of Florida, receiving his juris doctorate degree in 1995. While at the University of Florida, Mr. Meyer was inducted into Florida Blue Key and Phi Beta Kappa. Mr. Meyer was first trained as a lawyer by Richard T. Earle, Jr., and thereafter worked at the Attorney General's Office for the State of Florida in the Bureau of Criminal Appeals before becoming a senior staff attorney for the Florida Second District Court of Appeal. Mr. Meyer also served as a law clerk to the Honorable Chris W. Altenbernd, Retired, at the Second District Court of Appeal. Following his time at the Second DCA, Mr. Meyer worked at Carlton Fields, focusing his practice on appellate matters. In 2004, Mr. Meyer became an advocate for consumers as a partner at James Hoyer, and then later moved to Morgan & Morgan's class action department in 2009.

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Bankruptcy During Covid-19