Millions of Americans are being affected by the Covid-19 Coronavirus. Many are losing their jobs and are turning to unemployment. Many are starting to fall behind on their mortgage or rent. Let’s not even discuss the accumulating credit card debt and medical bills. The President has signed into law the bill from Congress called the CARES Act. This stands for Coronavirus Aid, Relief, and Economic Security Act.
The CARES ACT -Stimulus – What we get
The Cares Act is providing a one time stimulus to Americans in the form of a check in the amount of $1200 for most people ($2,400 for married couples) who make $75,000 or less (individual) or $150,000 for married couples. Plus they will send $500 for each dependent child. The government will use the 2019 tax return (2018 if 2019 is not filed yet) when calculating this limit.
The Cares Act also defers the tax return filing deadline until July 15,2020.
There are also changes that increase Unemployment benefits, increase the 401(k) loan limits, plus other benefits to businesses. The goal of these benefits is to help ease the burden of the stay at home directives, and to defray costs associated with it. The secondary goal is to help stimulate the American economy as well.
CARES Act and Chapter 7 Bankruptcy
There are other effects of the Cares Act that will help Chapter 7 bankruptcy filers. The stimulus money will not count toward monthly income on schedule I, nor will it have to be calculated on the Means Test calculation of disposable monthly income. The funds are designed to be used by the debtor, and not for the benefit of their creditors in the bankruptcy.
CARES Act and Chapter 13 Bankruptcy
Another benefit of the Cares Act is that it will allow Chapter 13 bankruptcy filers who have been affected by the Covid-19 Coronavirus and have confirmed Chapter 13 plans to file a motion to extend their payments up to 7 years (instead of the normal 5 years). This would allow the debtors the relief by deferring payments, or lowering the monthly payment based on need that has arose as a result of the pandemic.
Free Phone or Video Bankruptcy Strategy Sessions Available Now
I’m working out of my home office, and homeschooling my kids. It’s tough. I know that many of you there are in the same boat. We’ll get through this. Let me help you come up with a plan to help you as well. I am offering free bankruptcy consults by phone or by video (Skype/Zoom) to make it easier for you to get the information needed about the assistance I can provide. We are able to file everything electronically, and the courts have eased the burden of paperwork, by allowing E-Signatures as well. I am prepared to help you get back on track, to let you focus on what is important, the health of you and your family. Contact me know and we’ll get through this together. Thank you and stay safe. Terry Leeders