Coronavirus Bankruptcy Chapter 13 Law Changes
Chapter 13 Bankruptcy cases are on the rise in Ohio
Coronavirus bankruptcy law changes are part of the new CARES act. As part of the Cares Act, there have been changes to help those in Chapter 13 who have been affected by Coronavirus.
We currently have over 1,000 active chapter 13 cases, and many of our clients are experiencing financial distress as a result of the Coronavirus. The CARES Act, which provides financial relief for many, and the recent changes in Ohio unemployment law, providing for increased eligibility and benefits, will help, but only go so far. Not enough, for many, to keep up with their plan payments.
The CARES Act provides that we can extend chapter 13 plans for an additional year, if needed for Coronavirus bankruptcy cases! This is totally unprecedented, as is the situation we now face.
This may allow us to lower the monthly plan payment, and keep the case from being dismissed.
Also, the CARES Act provides that we do NOT have to include any monetary assistance received as a result of the virus in the calculation of the plan payment.
This may further permit plans to be modified to ensure that they can successfully complete. For complete chapter 13 information, read the ultimate guide to chapter 13.
CAVEAT – Since this legislation has just been enacted, we do not know how our local trustees and Judges will interpret the law changes.
My expectation is that the new provisions will be interpreted liberally in favor of our clients.
These new provisions apply to all cases, not just cases filed after the law went into effect.