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8 April 2021 / Garry A. Masterson

COVID-19 Bankruptcy Relief Extension Act Extends CARES Act Provisions

Topics: Bankruptcy

President Biden signed the COVID-19 Bankruptcy Relief Extension Act into law on March 27, 2021, previously passed overwhelmingly by Congress. The Act extends provisions of the Coronavirus Economic Stabilization Act of 2020 (CARES Act) through March 27, 2022.

Key provisions previously signed into law that are now extended include the following:
  • Increased eligibility for small businesses to file a subchapter V chapter 11 bankruptcy case, as long as debt is $7,500,000.00 or less.
  • Exclusion of coronavirus-related payments from income under the Bankruptcy Code for purposes of the filing of bankruptcy under chapters 7 and 13.
  • Debtors' ability to modify their chapter 13 plan to reduce payments and/or to extend the length of the plan, as long as confirmed before March 27, 2021 and a financial hardship is experienced due to the pandemic.
  • Chapter 13 debtors will not be denied a bankruptcy discharge if they have made all of their plan payments but have missed three or less mortgage payments due to the pandemic.
In addition, there are other provisions extended as well, as more fully covered in the prior Weltman alerts. We will continue to monitor for any additional changes or legislation that is introduced or signed into law. If you have any questions, please feel free to reach out to Weltman’s Bankruptcy team.

For more comprehensive information and insights, watch part I and II of our Ask a Pro: Navigating Chapters 7 & 13 Bankruptcies webinar series here and here.

This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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Garry A. Masterson

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