COVID-19, the CARE Act, and Your Chapter 13 Case

The COVID-19 pandemic continues to wreck havoc on people's everyday lives, leaving them worrying not only about their family's health, but also their jobs, homes, and ability to stay financially afloat. In response, this morning, Congress passed, and President Trump is expected to sign into law the CARES Act of 2020 to address the economic crises facing the nation. Much of the media coverage has centered around the direct payouts to working people and the expansion of unemployment benefits, but as a bankruptcy attorney, I've been interested to see how it would affect my clients, either in the midst of their Chapter 13 Plans or getting ready to file. Well we now have our answers:

Calculation of Current Monthly Income

The CARES Act specially excludes income received under the Act from being factored into their CMI, meaning that Debtors will not need be required to commit this income to their Chapter 13 plan, not will it affect their ability to qualify for a Chapter 7

7 Year Chapter 13s

Over the next year, the CARES Act will allow confirmed Chapter 13 cases to be amended  and extended out for up to 7 years if the Debtors income has been materially affected by the COVID-19 pandemic, either directly or indirectly.

You can read the full text of the bill here