COVID 19 AND MY BANKRUPTCY
There is no doubt that the recent pandemic of Covid-19 has hit many families physically, as well as financially. As businesses adjust to the rise and fall of new cases of infection, the certain thing seems to be uncertainty. Federal and state governments have put in place measures to protect the health and financial lives of families, while businesses have responded with varying options to delay the payment of mortgages, car loans and credit card payments.
Federally, the U.S. Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other relief, this act has deferred the payment of some government backed student loans, delayed the foreclosure of many government backed mortgages, provided added unemployment compensation, and expanded current bankruptcy relief. Among the relief provided, many are aware that special temporary provisions have been made that allow forgiveness of taxes and or penalties on the liquidation of IRA, 401(k), and other retirement funds. Caution should be taken when considering this option, as there might be relief available that allows you to eliminate debt, while preserving your nest-egg for your future. Do not move forward without sound advice.
New legislation is almost a certainty, as the current situation reaches the one year mark. Whether an additional stimulus package involves renewal of the previous federal unemployment subsidy, or checks issued to families directly, we anticipate that previous bankruptcy protections (exemptions) will remain in place, whereby we may protect the funds intended to benefit families directly.
Many families have benefited from mortgage and auto loan forbearances or deferrals. One thing is common among all these forms of relief, and that is they all contain differing details for these loans coming out of forbearance status. Our office has already addressed these issues in bankruptcy, and is familiar with dealing with the lenders, as well as the U.S. Bankruptcy Court, and Trustee as it relates to repayment.
There is a lot of conflicting information regarding the impact of the pandemic on financial decisions. Some who previously might not have been eligible for many protections from the bankruptcy process now find there is a window of eligibility available in the more common chapter 7 bankruptcy. Others will benefit from the potential to seek relief in chapter 13 where bankruptcy plan completion time has been expanded under certain circumstances.
We hear and understand the concerns of individuals and families facing struggles caused directly or indirectly by the current situation. The most common questions we receive revolve around the ability to keep a home, keep or buy a car, keep or lose tax refunds and bonuses, and continue to save for retirement. Each situation is unique. No two cases are the same. Often, bankruptcy is not necessary, or is better held off until circumstance have changed. From the CARES Act, to the HAVEN Act to state law changes and uncertain upcoming acts that provide relief, it is good to consult with a firm that is focused on debt relief law. At Keegan and Co., Attorneys, we understand recognizing and responding to constant change is the key to crafting an individualized approach to debt relief.
earnings who are surprised that they fall below the state median. Many of these clients have not considered the size of their families. However, one of the most important factors in determining whether or not you are a high-income debtor is family size. For example, a family of four making $85,000 would have earnings well above the state median of $77,500 for their family size. But what if that family making $85,000 includes six members? Because the median state income medical for a family of six is $93,700, the debtors do not need to take the means test.