It seems as though just about everything has been affected by COVID-19 in some way, and the bankruptcy process is included in that. So, exactly how has the coronavirus affected the bankruptcy process? We’re going to cover that question today as well as other important information to know if you’re involved in a bankruptcy case in Florida.
How has the Coronavirus affected the bankruptcy process
COVID-19 has changed many of the legal proceedings across the United States and around the world. From daily life to an impact on the federal, state, and local governments, there aren’t many things that haven’t changed due to COVID-19.
Understandably, all these changes can be confusing and difficult to navigate.
But now, many of these questions are focused on how the bankruptcy process has been affected specifically by COVID-19. In case you have those questions too, we’re going to share some of the frequently asked questions we get on the topic, along with their answers.
Please keep in mind the following information is meant to serve as guidelines and it is not a substitute for legal advice.
Do you still provide bankruptcy and debt collection defense services despite the coronavirus pandemic?
Yes, however, all consultations and/or meetings are conducted by telephone in order to ensure the safety of you, our staff, and other clients. Documents and financial records will be exchanged and reviewed by use of email, text, and conventional mail.
Are bankruptcy courts still open in Florida?
Bankruptcy courts are still open. But most court hearings are done via telephone rather than in person. As outlined by the United States Bankruptcy Court for the Southern District of Florida, a face mask or covering is required for every person entering any courthouse facility.
Can I still file for bankruptcy amid COVID-19?
Yes, bankruptcy cases can still be filed.
Do I still need to pay my mortgage?
Yes.
What if I can’t afford my mortgage payment during COVID-19?
In some cases, you may be offered a Forbearance Agreement by your mortgage lender. Absent such an agreement, bankruptcy courts still expect you to make your mortgage payment. Speak with your bankruptcy attorney to find out what options are available in your case.
How will my automatic stay be affected?
Unless your case has been dismissed, the automatic stay remains in effect during the coronavirus.
The automatic stay prohibits your creditors from attempting to collect on the debts. Creditors cannot call, send correspondence, or file/continue a lawsuit against you once the bankruptcy case has been filed because of the automatic stay. The automatic stay goes into effect immediately upon filing your bankruptcy case.
What about 341 hearings?
The 341 hearing is the Meeting of Creditors conducted pursuant to Section 341 of the U.S. Bankruptcy Code. Debtors who file a Chapter 7 or 13 Bankruptcy Case must attend this hearing.
These hearings are often short meetings conducted in-person by the Bankruptcy Trustee assigned to the case. However, these meetings must be conducted by telephone or other forms of remote communication for all Bankruptcy Cases filed through October 8, 2020. Debtors living on the Treasure Coast (Palm Beach, Martin, St. Lucie, and Indian River Counties) are having their 341 hearings conducted by telephone.
The Bankruptcy Trustees will resume in-person 341 hearings for cases filed after October 10, 2020, unless the telephone policy is extended again. The telephone policy initially applied only to cases filed through July 10, 2020.
By the way, if you’d like to learn about the bankruptcy process during normal conditions, have a look at this post.
How have bankruptcy rules changed under the CARES Act?
The CARES (Coronavirus Aid, Relief, and Economic Security) Act has resulted in some major changes to several bankruptcy rules across the country. These changes are set to expire on March 27, 2021.
Here are a few things to know about how the CARES act has changed bankruptcy rules:
- Stimulus checks and other payments under federal law that are related to the coronavirus will not count as current monthly income for debtors seeking to file under Chapter 7. These payments will also not count as disposable income for debtors seeking to file under Chapter 13.
- Debtors with previously confirmed Chapter 13 repayment plans may be able to extend the length of their plan from the maximum of five years to seven years. To do this, notice and a hearing is required. The debtor must also prove material financial hardship resulting specifically from COVID-19.
- Receiving a stimulus check will not affect your eligibility to file under either Chapter 7 or Chapter 13 bankruptcy.
What about the Original Signature requirement for Bankruptcy Paperwork?
You may already know bankruptcy attorneys usually need to get an original signature (also called a “wet signature”) from their debtor client on their petition to file for bankruptcy even though the case is filed electronically.
Many bankruptcy courts are waiving this requirement of the bankruptcy process during the coronavirus pandemic. In many cases, debtors and attorneys can review their paperwork virtually, saving them an in-person visit.
The US Bankruptcy Court for the Southern District has waived the Original Signature requirement provided the attorney and debtor satisfy one of three alternatives listed below.
- The debtor digitally signed the document using commercially available digital signature software which has signature authentication and the attorney maintains a copy of the digital signature.
- The debtor provides the attorney her express written permission to sign the document on her behalf, and the attorney maintains a hardcopy of the express written permission.
- Or, the debtor provides an image of her signature on the document to the attorney, and the attorney maintains a hard copy of that signature for the file.
What else should I know?
During this difficult time, we also want you to know that help is available. At the Law Office of Brent M. Myer, PLLC, we believe bankruptcy isn’t the end. Instead, it’s an opportunity for a fresh start. And we’re here to help every step of the way!
Take a look through our frequently asked questions to find out more about bankruptcy help in Stuart, Fort Pierce, Port Saint Lucie, and other areas of the Treasure Coast.
Or contact us today for a free consultation. We look forward to hearing from you!