shape
shape
shape
shape
shape
shape
18 February 2022 / Geoffrey J. Peters

The CARES Act: Bankruptcy Provisions Set to Expire

Topics: Bankruptcy

On March 27, 2020, The Coronavirus Aid, Relief, and Economic Act (CARES Act) was signed in response to the economic downturn in the United States from the COVID-19 pandemic. The CARES Act had a number of temporary bankruptcy provisions with a specific sunset date as to when the provisions would expire. The sunset provisions were extended for an additional year by the COVID-19 Bankruptcy Relief Extension Act of 2021.

Three specific provisions of the CARES Act are set to expire on March 27, 2022, unless further extended. The first two provisions relate to what is considered income for bankruptcy purposes. COVID-19-related payments, including recovery tax rebates and child tax credit payments, were excluded from current monthly income under the CARES Act. Upon expiration, these payments will be considered as income. The increase in income could provide for a more significant distribution to creditors in a bankruptcy proceeding.

The third provision under the CARES Act that is expiring relates to extending the duration of chapter 13 plans. Under the CARES Act, a chapter 13 debtor could seek a plan modification to extend plan payments up to 84 months after the due date of the initial plan payment. To be eligible, the debtor’s chapter 13 plan must have been confirmed prior to March 27, 2021, and the relief must be sought pursuant to the CARES Act. The debtor must demonstrate that they are experiencing or have experienced material financial hardship due directly or indirectly from COVID-19. Upon the expiration of this provision, the debtor cannot modify their plan to extend beyond 60 months.  

Our team is constantly monitoring these updates. If you have any questions, please connect with Geoffrey Peters at any time. For more comprehensive information and insights, read our 2021 Consolidated Appropriations Act Places Limitations on Preference Demands and/or COVID-19 Bankruptcy Relief Extension Act Extends CARES Act Provisions blogs.

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.

Related News

Insights / 20 September 2022

An Interview With 2022 CLLA President Jim Kozelek

In May of 2022, Jim Kozelek, shareholder and office managing attorney of the firms Columbus, OH office, was elected as president of the Commercial Law League of America (CLLA). After serving for several months, we decided to sit down with Jim to reflect back on his experiences.
Read More
News / 16 September 2022

Weltman Announces Detroit Office Relocation

Weltman, Weinberg & Reis Co., LPA, a full-service creditors' rights law firm with over 90 years of client service, is excited to announce the relocation of its Detroit office. The new office space is located at 3155 West Big Beaver Road, Suite 260, Troy, MI 48084.
Read More
Insights / 15 September 2022

5 Frequently Asked Questions about POAs and Guardianships

On the surface, powers of attorney (POA) and guardianships seem almost identical to each other. They are both legal tools and processes that allow someone to make decisions on behalf of another individual.
Read More

Join Our Email List

Get the latest articles and news delivered to your email inbox!
Subscribe

Contact the Author

Geoffrey J. Peters

Shareholder
Contact

Join Our Email List