YOU ARE NOT IN THIS ALONE

Everyone is experiencing some sort of financial setback due to the outbreak of the COVID-19 pandemic. Indeed, some have been hit harder than others. Many people have lost their jobs and are trying to figure out how they will feed their families and pay their mortgages. Then there are others that have lost their retirement accounts or investments. The uncertainty of the future exacerbates the situation. Many of us cannot even put our heads around this new reality. Just two months ago, you had a secure job with a decent salary and you were thinking about a special purchase or vacation you wanted to take or your retirement savings was growing and you were looking forward to the day you could retire. Then boom the plug is pulled forcing you to reevaluate your situation.

If you are having difficulty paying your bills, bankruptcy may be an option for you. No one ever wants to file bankruptcy but the relief that a bankruptcy filing provides to you makes the choice to file a prudent decision. The good news is the CARES (Coronavirus Aid, Relief Economic Security) Act passed by the federal government includes certain provisions to make bankruptcy more available to individuals and to small businesses. In determining whether an individual is eligible to file a chapter 7 case, an analysis of the individual’s household income in the six-month period before the filing is necessary. The CARES Act provides that coronavirus payments received by individuals from the federal government are excluded from this analysis. This helps an individual to qualify for a chapter 7 filing and to avoid having to file a chapter 13 where the individual would have to propose a plan to pay creditors. The CARES Act also provides help to chapter 13 debtors by excluding any coronavirus related payments from disposable income. This means that a chapter 13 debtor may use those payments to meet every day living expenses and not have to contribute those funds to a chapter 13 plan. The CARES Act further provides relief to those in Chapter 13 by allowing a debtor to extend the term of the plan. Finally, the CARES Act has expanded the requirements to qualify as a small business under chapter 11. A small business chapter 11 filing is streamlined and more affordable than a traditional chapter 11 filing.

Therefore, while you, like many others, never envisioned having to file for bankruptcy, seeking bankruptcy relief may be the best solution for you. Bankruptcy was designed to remedy financial hardships that result from an unanticipated interruption in income flow. This is precisely the situation we are in now. So, I urge you to seek advice from an experienced bankruptcy counsel and discuss your options. You are not in this alone.

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Kimberly Berson an experienced bankruptcy attorney and an assistant adjunct professor of business law. She also teaches paralegal courses on bankruptcy law and legal research and writing. You may contact her at 516-847-5122 or kbersonlaw@gmail.com.

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