Planning for the Future during
What You Need to Know
Is the Bankruptcy court still open?
Yes. However, most court hearings will be done over the phone and not in person.
Can I File for Bankruptcy right now, even with Shelter in Place Order?
Whether you were struggling financially before the pandemic, or the quarantine has sent you into a state of financial distress, you may need the protections provided by filing bankruptcy. Dealing with the uncertainty of the COVID-19 pandemic is especially challenging for those who need to file for bankruptcy. Fortunately, Bankruptcy courts are open in the NDGA, and they have modified the rules temporarily to make it easier to represent clients in a bankruptcy case given the current pandemic.
If you are I n need of bankruptcy protection, Baskerville Lottie Law offers virtual consultation, any documents necessary for review can be scanned and emailed, and we are prepared to electronically file on your behalf. Once your bankruptcy case is filed, you have an automatic stay of protection. When the stay is in effect, your wages can’t be garnished, and repossession and foreclosure efforts will be halted. The stay remains in effect until your case is discharged or dismissed.
Should I File for Bankruptcy If I Can’t Afford My Mortgage Payments because of Covid-19?
If you were considering bankruptcy and struggling with mortgage payments before the enactment of the CARES Act, you should know that foreclosure proceedings have been temporarily halted and no new proceedings can begin on federally backed mortgage loans. This “grace period” will extend at least into mid-May.
If you have a federally-back mortgage loan, you may contact your servicer and request forbearance if you are experiencing financial hardship due to the COVID-19 emergency. The hardship can be direct or indirect and forbearance can be requested regardless of delinquency status.
The Act states the forbearance "shall" be granted for up to 180 days and "shall" be extended at borrower's request for an additional 180 days. During the forbearance period, the servicer cannot charge or collect any fees, penalties, or interest beyond what could be charged if the borrower made all payments timely.
The CARES Act also requires lenders to grant borrowers up to 180 days of forbearance if requested. They must prove that they are experiencing financial challenges directly or indirectly caused by Covid-19. An additional 180 days could be available if problems continue.
Mortgage lenders are also forbidden under the act to charge fees, penalties, or interest beyond what would have been due had payments been made on time.
If you do not have a federally backed loan, relief offered is up to your servicer. You should contact your servicer directly to determine what options may be available to you. Bankruptcy will stop foreclosure proceedings with exceptions. Contact Baskerville Lottie Law or an experienced bankruptcy attorney in your area to discuss your options.
What if I can not pay my rent?
If you live in a federally backed multi-family unit, owners of the unit are eligible for up to 30 days of forbearance with the possibility of two extensions beyond the initial 30 days. Landlords granted forbearance cannot initiate eviction proceedings for non-payment of rent, nor can they charge late fees or penalties during the forbearance period. However, Landlords do not have to accept the forbearance and can proceed with eviction proceeding for non-payment of rent if they choose to do so unless there is a local order that temporarily stops evictions processes in your area. You should contact Baskerville Lottie Law or an experienced bankruptcy attorney in your area to discuss your options.
Should I File for Bankruptcy Because I Had to Shut Down My Business because of Covid-19?
The simplest answer to this is “maybe,” but there are many things to consider before you proceed. The federal government, as well as some local governments, are extending financial support to small businesses. Before any business owner decides to pursue Chapter 7 or Chapter 11 relief, they should explore all remedies available. Small small business owners may also be faced with considering a personal bankruptcy as well due to personal guarantees and shared debt with the business. You should contact Baskerville Lottie Law or an experienced bankruptcy attorney in your area to discuss your options.
Do I still have to meet the deadlines in my case?
You should continue to meet all the deadlines set in your case (i.e. payment due dates, deadlines to cure deficiencies, deadlines to submit the credit counseling course and financial management course, and any deadlines to provide your trustee requested documents). Speak with your attorney if you have any concerns meeting your deadlines.
What does it mean if my 341 meeting or hearing is “continued until a later date to be determined”?
If you had a meeting or hearing scheduled between March 14, 2020 and April 10, 2020 and received notice that it is “continued” your meeting was moved to a new date. As of April 1, 2020, all courts have suspended in person 341 meetings. Trustees will conduct 341 meetings by telephone.
You will receive a new hearing notice in the mail with the phone number, access code and security code along with specific instructions on what to do on the call. Each trustee may have different procedures to conduct the telephonic meetings. Read your hearing notice carefully for instructions.
The Trustee may send you a form for you to complete and sign in front of a notary public. This affidavit is to verify your identity.
If the notice doesn’t list a new date, the new date has not yet been set by the court. Remember to check your mail and/or court notices for updates. You can also contact your trustee ‘s office periodically if you have not received a new hearing notice to see if a new date was scheduled.
In a Chapter 13 case, the continuance of the creditor meetings does not relieve debtors of their obligation to commence making plan payments to the Trustee not later than 30 days after the date the petition was filed. Speak with your attorney if you have any concerns regarding your payments.
Is my confirmation hearing post-poned?
No. Chapter 13 confirmation hearings and hearings on miscellaneous chapter 13 matters will be held as scheduled, counsel will appear by telephone. Speak with your attorney if you have any questions.
Can I keep my economic relief payments?
The Trustee will not be seeking a turnover of any economic relief payments related to coronavirus. Speak with your attorney if you have questions or concerns.
What if I can’t make my Mortgage Payments or Trustee Plan Payments current in my case due to COVID19?
You should contact your attorney if you have suffered economic harm due to the COVID-19. The CARES Act enacted on March 27, 2020 allows Debtors in current Chapter 13 proceedings to modify their plans and lower their payments by extending the deadlines.
Will my discharge be delayed?
Your discharge may be delayed if your 341 meeting is rescheduled or continued until further notice. Be sure to check your mail. The Court will send you updated information by mail. Speak with your attorney if you have any questions.
Will my automatic stay be affected by COVID-19?
Your automatic stay will not be affected unless your bankruptcy is dismissed.
Keep up with your paperwork deadlines.
All filing fees and paperwork must still be submitted on time. Deadlines for submitting course 2 certificates and other due dates still apply. Missing a deadline can delay your case further and there’s no promise the court will be lenient to pro-se debtors.
Information is being updated daily, so check the bankruptcy court for COVID-19 related changes.