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Consumers and businesses who are facing overwhelming debt turn to the bankruptcy court for assistance. However, in light of the current COVID-19 pandemic, changes in bankruptcy laws are presenting some benefits and challenges for claimants. Reviewing bankruptcy changes that might come because of Coronovirus helps the claimants determine what to do now.
Filing for Chapter 13 as a Consumer
According to new changes in bankruptcy laws, consumers who want to file for chapter 13 bankruptcy can extend their cases up to seven years. The changes apply to any consumers who want to claim a material financial hardship because of the recent pandemic. The changes can help the consumers get the full benefit of filing for bankruptcy and extending their case to make their payments lower and more affordable over a longer duration. When filing for any chapter of bankruptcy, consumers are required to report their wages and incoming payments, such as dividends, child support, or alimony. Consumers who need help starting a claim can visit TulsaBankruptcyLawyers.net for further assistance now.
How Does the CARES Act Affect Small Business Bankruptcies?
Small businesses can file for chapter 11 through changes in the Small Business Reorganization Act modifications that were included in the CARES Act of 2020. The changes increase the amount of commercial debt allows through chapter 11 and protect better protection for the business owner. A trustee is appointed and will manage the bankruptcy for the small business owner. The business owner can also extend their bankruptcy claim for a longer duration to reduce expenses. However, some businesses could take advantage of shorter processes and eliminate their debt faster.
Protection For Stimulus Payments
Stimulus payments for consumers are protected under new and emerging bankruptcy codes. The consumers will not be required to report their stimulus check as income and won’t have to worry about negative repercussions through the bankruptcy courts. Some stipulations might also apply to businesses that are filing for bankruptcy and offer the same benefits regarding the stimulus check. However, the amount of the stimulus check could play a role in this determination for businesses filing for bankruptcy.
Some Bankruptcy Hearings Won’t be Held in Person
Some bankruptcy hearings won’t be held in person due to the increased risk of COVID-19. Currently, some jurisdictions are conducting meetings via phone with multiple parties including creditors. Where possible courts are streaming the meetings via online conference calls to give each party a chance to communicate properly.
Discharges Could be Delayed
Discharges could be delayed for some cases while the courts remain closed to the public. Even though the judges, clerks, and key employees are continuing to work during the pandemic it doesn’t mean the processes are being managed quickly. Shorter staffs could lead to significant delays, and some consumers and businesses will need to comply with their bankruptcy orders for a longer durations. However, some jurisdictions won’t penalize the claimants after the designated date for the discharge as long as the claimants have completed their requirements.
Consumers and businesses can still file for bankruptcy and might receive additional help if they qualify. New changes are emerging daily in the bankruptcy court and could change the way claimants will file in the future. Understanding the CARES Act and its effects on existing laws could help consumers and businesses learn what is now possible. Reviewing bankruptcy changes helps businesses and consumers find the answers they need when starting a claim.