Filing for Consumer Bankruptcy in the Time of Coronavirus
Will the coronavirus pandemic result in more consumer bankruptcy filings in the coming months? Given that thousands of people who own small business, who work in the restaurant industry, and who earn a living through the gig economy are now out of work and without incomes, many if not most of those Americans may need to seek bankruptcy protection. According to a recent article in The Wall Street Journal, bankruptcy experts in the National Bankruptcy Conference (NBC) are urging the federal government to broaden bankruptcy protections for consumers and businesses alike during this unprecedented moment “to help ameliorate the financial damage stemming from the coronavirus.”
More specifically, the article explains, bankruptcy law practitioners, scholars, and judges who make up the National Bankruptcy Conference advisory body argue that, “to blunt the economic fallout from the pandemic, special bankruptcy protections should be made available to more small businesses and bankruptcy courts should have more leeway to aid struggling consumers.” We want to tell you more about the National Bankruptcy Conference’s focus on business and consumer bankruptcy, as well as to say more about the practical issues of filing for bankruptcy during the coronavirus pandemic.
National Bankruptcy Conference Addresses Congress
The information in the article comes out of a letter that the National Bankruptcy Conference sent to members of Congress. In that letter, NBC explained how COVID-19 “threatens the lives, the livelihoods, and the savings of millions of Americans.” Accordingly, as consumer and small business advocates, the National Bankruptcy Conference urged Congress to act to “ensure that our bankruptcy system provides effective and efficient relief to direct and indirect victims of the virus.” In addition, the letter underscored that there is a pressing need to “provide at least temporary relief from financial obligations for individuals and businesses to avoid massive numbers of both bankruptcies and economically untenable foreclosures.”
In order to provide relief for small businesses and consumers, the National Bankruptcy Conference made a handful of recommendations. Those relief recommendations include additional tax credits, expanding bankruptcy filing limits for small businesses, changes to Chapter 13 bankruptcy for consumers, and “breathing space for debtors.” What changes did the National Bankruptcy Conference recommend for Chapter 13 bankruptcy? The following is a brief list of some of those recommendations:
If you were planning to file for consumer bankruptcy on the sooner side, can you even do so practically given self-isolation and stay-at-home orders? According to a recent report from ABC News, courts across the country have closed temporarily, including state and federal courts. As of March 24, 2020, a total of 94 federal courts had closed, and the U.S. Supreme Court even delayed a number of cases.
In general, if cases can be heard in lower federal courts with social distancing practices in place, those courts can still operate. As such, you may still be able to file for bankruptcy and have a court date, yet it is important to recognize that “bankruptcy courts could soon face the conundrum of a flood of activity while at the same time keeping in-person interaction to an absolute minimum.”
Contact a Bankruptcy Lawyer in Oak Park
If you have questions about filing for bankruptcy in connection to the coronavirus pandemic, an experienced Oak Park bankruptcy lawyer at our firm can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.
See Related Blog Posts:
Can I File for Bankruptcy Again?
What Property Will I Be Able to Keep if I File for Bankruptcy?
More specifically, the article explains, bankruptcy law practitioners, scholars, and judges who make up the National Bankruptcy Conference advisory body argue that, “to blunt the economic fallout from the pandemic, special bankruptcy protections should be made available to more small businesses and bankruptcy courts should have more leeway to aid struggling consumers.” We want to tell you more about the National Bankruptcy Conference’s focus on business and consumer bankruptcy, as well as to say more about the practical issues of filing for bankruptcy during the coronavirus pandemic.
National Bankruptcy Conference Addresses Congress
The information in the article comes out of a letter that the National Bankruptcy Conference sent to members of Congress. In that letter, NBC explained how COVID-19 “threatens the lives, the livelihoods, and the savings of millions of Americans.” Accordingly, as consumer and small business advocates, the National Bankruptcy Conference urged Congress to act to “ensure that our bankruptcy system provides effective and efficient relief to direct and indirect victims of the virus.” In addition, the letter underscored that there is a pressing need to “provide at least temporary relief from financial obligations for individuals and businesses to avoid massive numbers of both bankruptcies and economically untenable foreclosures.”
In order to provide relief for small businesses and consumers, the National Bankruptcy Conference made a handful of recommendations. Those relief recommendations include additional tax credits, expanding bankruptcy filing limits for small businesses, changes to Chapter 13 bankruptcy for consumers, and “breathing space for debtors.” What changes did the National Bankruptcy Conference recommend for Chapter 13 bankruptcy? The following is a brief list of some of those recommendations:
- Excluding relief payments from a debtor’s disposable income;
- Permitting debtors to modify Chapter 13 repayment plans if they have been affected by COVID-19; and
- Additional options for mortgage modifications.
If you were planning to file for consumer bankruptcy on the sooner side, can you even do so practically given self-isolation and stay-at-home orders? According to a recent report from ABC News, courts across the country have closed temporarily, including state and federal courts. As of March 24, 2020, a total of 94 federal courts had closed, and the U.S. Supreme Court even delayed a number of cases.
In general, if cases can be heard in lower federal courts with social distancing practices in place, those courts can still operate. As such, you may still be able to file for bankruptcy and have a court date, yet it is important to recognize that “bankruptcy courts could soon face the conundrum of a flood of activity while at the same time keeping in-person interaction to an absolute minimum.”
Contact a Bankruptcy Lawyer in Oak Park
If you have questions about filing for bankruptcy in connection to the coronavirus pandemic, an experienced Oak Park bankruptcy lawyer at our firm can speak with you today. Contact the Emerson Law Firm to learn more about how we can assist you.
See Related Blog Posts:
Can I File for Bankruptcy Again?
What Property Will I Be Able to Keep if I File for Bankruptcy?
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