24300 Southfield Road, Suite 210, Southfield, Michigan 48075
Mon. – Fri. 9:00 - 5:00 / Sunday – By Appointment

Location

24300 Southfield Road, Suite 210,
Southfield, Michigan 48075

Bankruptcy in the Time of Coronavirus

  May 24th, 2020

Deciding whether or not it’s the right time to file for bankruptcy during COVID-19 is a difficult decision in the best of times. The decision only becomes more difficult during these unprecedented times of pandemic and economic crisis. There are several things that need to be considered by anyone thinking of filing for bankruptcy while the Coronavirus remains a global issue. Some of those issues

The number of unemployed in Michigan has skyrocketed during the COVID-19 pandemic, a lot of people have lost their jobs and their incomes have dropped substantially and many businesses are shut down and have laid off workers who have filed for unemployment but is that having an effect on people filing for bankruptcy?

With the global economy thrashed by the ongoing pandemic, countless companies are now treading the waters of near-insolvency, we have seen that Hertz filed for bankruptcy protection, unable to withstand the coronavirus pandemic that has crippled global travel and with it, the heavily indebted 102-year-old car rental company’s business. Department stores have been on the decline for years, and now that the pandemic has emptied brick-and-mortar stores, they may die out entirely. JCPenney filed for bankruptcy, becoming the third major retailer following J.Crew and Neiman Marcus to restructure its debt as the coronavirus continues to pummel the retail industry.

The Coronavirus Aid, Relief, and Economic Security Act will provide many Americans with a one-time cash payment to help cover household expenses – i.e., rent, food, utility bills. How will these stimulus payments affect debtors going through the bankruptcy process? Can they be seized? Yes, the funds can be seized. The CARES Act itself has no protections for stimulus payments from creditors. If there is a garnishment order against a bank account, a creditor could seize those funds. The good news is that the bankruptcy system ordinarily works well, even in times of crisis. For cases under chapter 7 and 13, the CARES Act modifies the definition of “current monthly income” in 11 U.S.C. § 101(10A)(B)(ii) to expressly exclude payments made under federal law relating to the national emergency declared by the President under the National Emergencies Act with respect to COVID-19. Similarly, the Act provides that any payments made to individuals under federal law relating to the COVID-19 pandemic do not constitute “disposable income” required to be committed to a chapter 13 debtor’s plan pursuant to 11 U.S.C. § 1325(b)(2). The amended definition of “disposable income” will benefit both current chapter 13 debtors who did not have confirmed plans as of the date of enactment of the CARES Act, as well as future chapter 13 debtors.

The COVID-19 (coronavirus) pandemic in Detroit, Michigan and the entire world has damaged the economy, leaving many families and business owners in Detroit metro areas worried about how they’ll pay for even the most basic expenses. In the midst of this crisis, you might be considering filing for personal bankruptcy whether chapter 7 or chapter 13, researching how bankruptcy would affect your business, or wondering how COVID-19 will affect an existing bankruptcy filing. No matter your situation, our Detroit bankruptcy lawyers in Southfield, Michigan are here to help give you the answers and assistance that you need.

With so many people in Detroit, Wayne County, Macomb County, Oakland County and many cities in Michigan having lost their jobs due to the COVID-19 pandemic, many individuals will have no option other than to file for a personal Chapter 7 bankruptcy.

During this COVID-19 pandemic, no one should be in any way ashamed to speak to our Detroit bankruptcy lawyers to discuss the appropriate strategy for getting through this crisis. After all, we are all in this together. We are here to help you.

If you are seeking legal representation or if you are looking for a free bankruptcy consultation, contact us online or give us a call at 248-281-6299 to schedule a consultation. No office visit necessary. We offer zoom chat and consultation over the phone.

For more information visit https://www.bankruptcytrack.com/
Or follow us on Facebook: https://www.facebook.com/BankruptcyTrackcom-112885717049175/?modal=admin_todo_tour

Leave a Reply

Your email address will not be published.