The COVID-19 pandemic has affected virtually everybody in Pennsylvania. If you and your family are lucky enough not to have caught the virus, your lives have almost certainly changed as a result of the statewide lockdown orders. You may have been furloughed at work or lost your job entirely.
As part of the CARES Act, Congress authorized stimulus payments to all Americans. If you are thinking of filing for Chapter 13 bankruptcy to deal with overwhelming debt, or if you are in the midst of Chapter 13 bankruptcy proceedings, you may be wondering how your stimulus check and other aspects of the CARES Act affects your case. Here are some general answers to common questions about personal bankruptcy and the CARES Act.
Does my stimulus check count as income in bankruptcy court?
No. If you are going through Chapter 13 bankruptcy, you do not have to report your household’s stimulus check as income, and it is not subject to claim by your creditors. That money is yours to keep.
Should I seek an extension on my repayment plan?
The CARES Act allows people in Chapter 13 bankruptcy to seek a significant extension on their repayment plans. Instead of the usual three-to-five-year agreement you are currently in, you can ask the bankruptcy judge for an extension of between three and seven years. To get an extension, you must show the judge that you are experiencing financial hardship.
What evidence can show hardship?
To prove that the pandemic and lockdown have created financial hardship, you should provide documentation of your current household income and your living expenses. These documents should show how the pandemic has affected your income, and show how you are struggling to make your current payments.
Talk to a bankruptcy attorney about the CARES Act
For information about Chapter 13 bankruptcy and the CARES Act geared to your specific situation, you should contact an experienced bankruptcy attorney.