Chapter 13 Bankruptcy Law Changes Due to Covid-19

When Congress passed the CARES Act in March 2020, they included a provision to assist people in active Chapter 13 cases. This provision allows a chapter 13 debtor to extend their plan from 5 years to 7 years if they have been impacted financially by Covid-19. There are few details about the extent of the impact that needs to be proven in order to qualify for this extension, but we suspect the Courts will be very generous here and will allow any financial hardship to qualify. We are already working on a few of these extensions in our office.

This new law applies only to cases filed before the law took effect. New cases can only be a maximum of 5 years in duration. We encourage any client who is struggling with their Chapter 13 payment to seek an extension of their plan if they have been impacted by the Virus.

More details to follow.

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