Cares Act Increased What Is Excluded From Income, Meaning It Helps You to Qualify
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. Been talking a lot about Small Business Reorganization Act and all the wonderful opportunities that provides for small businesses right now doing chapter 11. And it got me thinking about the CARES Act, which had some impact on that in upping the debt limit under which you can qualify as a small business.
Got me to thinking I’ll do a little video how does it help you in chapter seven and 13? So I’m going to be reading. I’ll just… I don’t want to plagiarize, so I’m getting this from the National Law Review. I don’t think they’ll mind me quoting them just so I can cover the points. So CARES Act, Coronavirus Aid Relief and Economic Security Act. I’m sure everyone’s familiar with that. That’s part of the stimulus and lots of other things to try to help us get through and help the economy get through this challenge.
So how does that help you in the seven and 13? Remember seven is a liquidation, 13 is pay what you can, ie your disposable income for three to five years. So the CARES Act increased what is excluded from income, meaning it helps you to qualify. Because what might’ve been considered income toward the cutoff now is not calculated.
So specifically things under the COVID emergency care and under the CARES Act, the stimulus, certain other financial benefits, which I won’t list them all here, but if you’ve gotten anything through the government for COVID, it’s probably going to be excluded.
Call me if you need an exact opinion on something. Are excluded from income. As I’ve said in many videos, that stimulus, I’ve cut my rate for people impacted by COVID who have lost their job and that stimulus may be enough for you to hire an attorney and get things done when you normally wouldn’t.
Okay. Chapter 13. As we’ve talked about you’ve got a plan, for three to five years you have to pay monthly what you can. Modifications in plan period extensions. So that means you can modify your plan and get that modification confirmed in a way to help you, meaning lower your payments dramatically, generally, to get through this crisis without getting your plan thrown out. Without this crisis, they’re not very forgiving or helpful with that. But you can get those kinds of modifications right now.
Also, you can extend your plan. So typically five months was the absolute, 60 months. The most that you can have your plan extend and for loans that you have to pay off in full in your chapter 13 plan or arrearage on homes, things like that, that can make it difficult. Now you can extend farther, 72 months in some cases.
Having a look here. Yeah, it doesn’t actually say in the article, but my understanding is we can go from 60 to 70, add an extra sixth year on to a plan, which in addition to modifying to lower payments, you can now extend it out. So if you have a set amount you have to pay, just lowering the payment wouldn’t help you because you still couldn’t make it, but now lower it and extend it, you can get it done.
The impact of the CARES Act on your creditors. A secured creditor is generally still entitled to the collateral. Unsecured creditors, however, of course if we’re having plan modifications without an increase in the length of the plan, they’re getting paid less and there’s not going to be a lot of argument about that in your typical 13.
So that’s kind of an overview of the major impacts of the CARES act on seven and 13. Certain things excluded from income, and chapter 13 is getting a whole lot easier to get through during this period. So if you have any further questions or need to do a bankruptcy, call me one at 1-888-Debt-Line. Edward@Wirthlawoffice.com. And you can also reach us on Facebook at Oklahomans For Debt Relief. Talk to you soon.