During this unprecedented time of the coronavirus pandemic, many individuals and businesses are feeling the financial burden of reduced revenue. As we adhere to social distancing and heightened safety protocols, both individuals and businesses are seeing the drastic effects of this pandemic on their income. Here, the qualified bankruptcy attorneys at Grossbart, Portney & Rosenberg, P.A. discuss the process of filing for bankruptcy during the coronavirus pandemic, and resources available to help businesses recover from financial damage.
Consumer Debtors & Businesses See Relief Under CARES and SBRA Acts
The Coronavirus Aid, Relief and Economic Security Act, otherwise known as the CARES Act, was passed to give financial relief to families and businesses during this time of the novel coronavirus. The CARES Act provides fast and direct economic assistance for American workers, families and small businesses and preserves jobs for American industries. The Small Business Reorganization Act, or SBRA, originally took effect in February 2020, which applied to small businesses with under $2.7 million in debt. Once the CARES Act was passed the following month, widening the debt threshold to $7.5 million for businesses to seek help. It is important to note that under these acts, at least half the debt must come from the debtor’s business expenses and activities in order to qualify under the SBRA. In relation to control under the SBRA, certain debtors can remain in control of their business during the bankruptcy proceedings, however, a trustee will be appointed to each small-business debtor case.
How the CARES Act Impacts Chapter 13 Bankruptcy
While the CARES Act does help businesses maintain some financial power throughout this confusing time, it also helps consumers handle their debts as they move forward in the bankruptcy process. Generally, in Chapter 13 bankruptcy, individuals enter into a payment plan lasting three to five years. The CARES Act offers relief on payments that would normally count as income, explains that payments related to COVID-19 relief are excluded from the definition of disposable income and increases the amount of money that an individual in Chapter 13 bankruptcy can keep rather than paying to creditors. Finally, individuals who entered into Chapter 13 bankruptcy before the coronavirus pandemic and have subsequently had a change in financial status can apply to have their payment plan extended to seven years.
Handling Filing for Bankruptcy Virtually During COVID-19
During this time, it is important to note that the general process of filing for bankruptcy has been altered, and that many creditors, judges and law firms are adapting to digital means of handling the bankruptcy process. At Grossbart, Portney & Rosenberg, P.A., we can represent you without the necessity of coming to our office, providing you with unmatched care through virtual consultation. When filing for bankruptcy, be sure to upload all documents electronically, and check with your creditors and lawyers to see if they are able to accept these documents through digital platforms. Additionally, be sure to do thorough research on any bankruptcy courses you may have to take in the future, and optimize your personal computer to be able to handle those meetings digitally if needed.
Speak With Bankruptcy Attorneys at Grossbart, Portney & Rosenberg, P.A.
At Grossbart, Portney & Rosenberg, P.A., it is our top priority to ensure that our clients understand their rights throughout the bankruptcy process, especially during this unprecedented time. As the COVID-19 pandemic continues, policies, laws and procedures are likely to change to accommodate these extenuating circumstances. To seek professional counsel and learn how the qualified bankruptcy attorneys at Grossbart, Portney & Rosenberg, P.A. can help you, contact our office today.