Merillville Bankruptcy Attorney Highlights the CARES Act (Covid19 Relief Act) and its Impact on Consumers & Business Owners

What is the CARES Act (Covid19 Relief Act)?

The CARES Act (Covid19 Relief Act) recently enacted by Congress in Spring of 2020 offers expanded relief for both consumers and businesses facing financial hardship due to the current COVID19 Pandemic.  The Act increases eligibility for individuals seeking bankruptcy relief by excluding certain COVID19 relief payments from the income calculations which determine a consumer’s ability to file for Chapter 7 Relief or determines the amount a debtor should be required to repay to their creditors in Chapter 13.  The Act also provides that debtors in Chapter 13 cases with confirmed plans can potentially extend their reorganization plan for up to two additional years to address any plan default incurred by those directly or indirectly effected by the COVID19 Pandemic.  For small businesses, the debt limit for utilizing the new Sub Chapter V of Chapter 11 has been increased to 7.5 million in total debt.  The Act also provides additional protections for mortgage borrowers with Federally backed mortgage loans offering forbearance for up to 180 days for borrowers experiencing financial hardship during the COVID19 Pandemic.  The Act also offers relief for Federal Student Loan borrowers by suspending payments due on certain loan and interest for accumulating on many student loans.

Everyone’s situation is different and how the provisions of this act apply to each individual’s situation may be different.  Please feel free to call our office or contact us online to discuss your situation in more detail.  Our firm remains open for business and available to serve the needs of our clients during this trying time.