If you are currently in a confirmed Chapter 13 Bankruptcy plan, newly extended COVID-19 legislation may allow you to reduce your Chapter 13 Bankruptcy payments.
President Biden just signed bipartisan legislation that has extended COVID-19 relief that was enacted last year (the Cares Act), which keeps in place bankruptcy relief for struggling consumers and businesses. Most provisions were extended until 2022.
Chapter 13 debtors can extend their repayment plan from 5 to 7 years if they were affected by the corona-virus pandemic. This allows the debtors whose Chapter 13 plans were confirmed on or before March 27, 2021 to extend their payments, thus reducing the monthly payments, making those payments easier to make. Previously, only those whose Chapter 13 bankruptcy plans were confirmed prior to March 27, 2020 were eligible.
In addition, consumers filing Chapter 7 or Chapter 13 bankruptcy will receive protection of their stimulus checks and enhanced unemployment benefits from creditors and the bankruptcy trustee, excluding these benefits from other types of income that would normally be used to re-pay creditors;
This extension also applies to the provisions which expanded the eligibility for small businesses qualifying for the easier small business chapter 11 bankruptcy process who would have otherwise been forced to close and liquidate as a result of the Coronavirus Pandemic.