Because of the safety protocols imposed in response to the global COVID-19 pandemic, many federal bankruptcy courts throughout the United States have adopted modified operations to ensure that physical distancing is observed at all times and to prevent beginning a contagion in a United States bankruptcy court.
In Washington, many courthouses have closed, leaving those dealing with bankruptcy to wonder how they’re supposed to proceed. Debtors who have filed for bankruptcy in a now temporarily closed bankruptcy court would still be covered by the automatic stay. If you’re already in the middle of bankruptcy proceedings, you may continue to enjoy this bankruptcy protection preventing debt collectors such as creditors and collection agencies from pursuing repayment through wage garnishment, lien, or even a simple phone call.
Meanwhile, if you had just been about to file bankruptcy when the court where you’d typically file closed, or if the pandemic has made it necessary for you to file for bankruptcy protection in the midst of court closures, contact a local attorney to find out what you can do to file a bankruptcy petition at this very irregular time.
As for courts that have chosen to stay open, filing for bankruptcy in them means going through additional steps and modified protocols. If you’re considering bankruptcy now, make sure that you find out what the current rules are in the district and courthouse where you’re supposed to file for bankruptcy.
Waiving of Wet Signature Requirement
Bankruptcy lawyers usually have to get their client’s original signature on the petition for bankruptcy, even when filing documents online. Find out how your bankruptcy court stands on this as many have waived this requirement to eliminate the need for bankruptcy attorneys and their clients to review paperwork and get the wet physical signature in person.
Meeting of Creditors by Telephone
The Bankruptcy Code requires Chapter 7 and Chapter 13 filers to attend a meeting of creditors under Section 341. However, the US Trustee Program has issued an order for bankruptcy filings through July 10, 2020, to conduct these meetings either by telephone or another form of remote communication while the coronavirus remains a threat.
CARES Act and Modified Bankruptcy Rules
The CARES (Coronavirus Aid, Relief, and Economic Security) Act has also given rise to some changes, albeit temporary, to the standard bankruptcy rules. The modification, which is to expire on March 27, 2021, created distinct differences in bankruptcy procedures like giving a filer under Chapter 13 seven years to carry out the approved payment plan instead of the usual maximum of five years. Take note, though, that if you’re the debtor, you have to show cause for an extension, proving that the pandemic is causing you material financial hardship.
Keep in mind as well that coronavirus-related payments like stimulus checks are not regarded as current monthly income if you’re filing under the liquidation bankruptcy chapter (7). If you’re filing under the reorganization chapter (13), they won’t be considered disposable income. They have no effect on your eligibility to declare bankruptcy under either filing chapter. If you’re an entrepreneur filing under Chapter 11, you should know that a business bankruptcy filing under Subchapter V has a significantly increased debt limit.
Do You Need Help with Bankruptcy at This Time? Contact a Washington Bankruptcy Lawyer Now!
It’s easy to see how these difficult times may be pushing many to consider filing bankruptcy. If you yourself have overwhelming financial problems and think the bankruptcy procedure bears the best solution, consult an attorney specializing in bankruptcy law for legal advice and guidance. Call us at Northwest Debt Relief Law Firm to speak with a skilled and experienced Washington bankruptcy attorney about your case.