On March 27, 2021, President Biden signed the COVID-19 Bankruptcy Relief Extension Act. This legislation will extend debt relief for personal and small businesses that were provided under the CARES Act.
What Will the Act Do?
- Eligibility for the Small Business Reorganization Act (SBRA) is extended through March 27, 2022
- Businesses with debt up to $7.5 million are eligible to file a Subchapter V Chapter 11 bankruptcy case
- The definition of "income" in Chapters 7 and 13 will exclude COVID-19 related payments
- Disposable income under Chapter 13 will not include COVID-19 related payments
- Families and individuals in Chapter 13 qualify for payment plan modifications if they are experiencing financial hardship due to the pandemic
- Payment Plans can be extended for up to seven years after the initial payment due date
Why Is the COVID-19 Bankruptcy Relief Extension Act Important?
As the pandemic continues to ravage communities around the U.S. and the delta variant makes its way to American shores, financial experts predict further financial hardship. National and state economies have yet to recover from the shutdowns in 2020, and most people are unsure how to handle these issues.
This new legislation helps bridge the gap left behind by the CARES Act, so families and individuals can continue to seek out debt relief despite the pandemic.
Small business owners, in particular, benefitted from the CARES Act, but now that the deadlines have passed, they are facing hard times once again. The COVID-19 Bankruptcy Relief Extension Act will primarily benefit individual debtors.
If you are a small business owner, contact a bankruptcy attorney as soon as possible. You may be able to pursue debt relief options outside of the CARES Act but do not attempt to solve debt problems without the counsel of a licensed attorney.
We Can Help
Whether you are an individual debtor or a small business seeking debt relief, Buchalter & Pelphrey Attorneys At Law can help. We are passionate about providing sustainable financial strategies to those in need throughout our community.
We have over 45 years of experience with bankruptcy cases, tax audits, appeals, and more. Our firm has handled thousands of cases with care. Our clients know that they will get the highest possible caliber of legal counsel for their cases.
Schedule your FREE consultation with Buchalter & Pelphrey Attorneys At Law for more information.