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Group Seeks to Amend Bankruptcy Laws for Coronavirus

In a Joint-Statement released March 24, 2020 concerning Bankruptcy amid Coronavirus, consumer advocacy groups, among others, are petitioning the government to supplement existing bankruptcy laws in an effort to protect those whose lives have been, or will be, turned upside down by Covid-19.

Among the current proposals to further protect bankruptcy filers, the group asks that the homestead exemptions be increased to afford individuals a better opportunity to remain in and keep their homes. The Homestead Exemption pertains to how much equity one may have in one’s primary residence and still be good candidate to file a Chapter 7 bankruptcy and potentially keep their home. How many people are on the deed, and how long they have been on the deed, are relevant factors, among others, when evaluating one’s candidacy to file a Chapter 7 bankruptcy. In most jurisdictions, the amount of equity one may have is less than $100,000.00 (in some jurisdictions, it’s under $50,000.00 or even as little as $10,000.00). The Group is petitioning the government to increase this level to $100,000.00 or more in every jurisdiction.

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Additionally, the Group proposes amendments to existing and future Chapter 13 bankruptcy filings. A Chapter 13 bankruptcy involves a repayment of some, or all, of one’s debts under a 3- or 5-year plan. Currently, the Group is petitioning to increase the debt limits on Chapter 13 filings. This move, if adopted, may help small businesses in need of assistance due to the Corona Virus Outbreak by permitting them to stay afloat and avoid a more expensive Chapter 11 filing. The Group also proposes some changes to existing filings, namely permitting debtors more time to pay their plans.

What this means for those who contemplate a bankruptcy filing may be changing on a day-to-day to basis. Accordingly, if you are considering filing for bankruptcy it is imperative that you contact a bankruptcy professional in your area to ensure that you are maximizing your anticipated relief under the new laws that may be enacted.

Call the Law Office of Simon Goldenberg, PLLC at (888) 301-0584 for a free phone evaluation.