The President signed into law the historic Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “Act”) on March 27, 2020. This $2.2 trillion stimulus package is designed to mitigate the widespread economic impact of the novel coronavirus. The Act includes certain provisions that temporarily modifies chapter 7 section of the U.S. Bankruptcy Code.
Some Federal Payments Are Excluded from Definition of “Income”
The CARES Act modifies the definition of “current monthly income” as it applies to chapter 7 bankruptcy. The Act expressly excludes payments under federal law relating to the national emergency declared by the President under the National Emergencies Act with respect to COVID-19. The Act also states that any type of payments received under federal law relating to the coronavirus pandemic does not qualify as “disposable income.”
In other words, receiving the stimulus check, or any other coronavirus related payments, within 6-months of filing a Chapter 7 Bankruptcy will therefore not disqualify a debtor from filing a bankruptcy under Chapter 7.
All of these changes are applicable in pending Chapter 7 cases and will be applicable for one year after the CARES Act becomes effective.
You Need Legal Representation
We are facing uncharted times, especially when it comes to all the new laws that are continuously being passed by lawmakers that will no doubt impact those have already filed bankruptcy and those who were in the process of filing.
If you have questions and or concerns about how the CARES Act will impact your particular financial situation, it is important that you immediately consult with an experienced Central Valley bankruptcy attorney about the options that will be available for your specific situation. It is important that you create a solution that will address your unique problems, as each person will have different concerns and needs.
Call an Experienced Central Valley Bankruptcy Attorney
If you are planning to file or in the midst of a bankruptcy proceeding, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to the CARES Act.