By Lara S. Martin –
Certain temporary amendments to the Bankruptcy Code vis a vis the Coronavirus Aid, Relief and Economic Security (CARES) Act expired on the two year anniversary of the CARES Act being signed into law on March 27, 2020. The temporary amendments to the Bankruptcy Code were originally to sunset on March 27, 2021 but on that date, the COVID-19 Bankruptcy Relief Extension Act of 2021 was signed into law extending the amendments for an additional year, however, no further extension was granted. Accordingly, the law has reverted back to pre-CARES Act changing with it certain amended forms, Official Forms 101, 122A-1, 122B-1, 122C-1 and 201. This includes the voluntary petition for non-individuals and individuals and Ch. 7, 11 & 13 Statements of Current Monthly Income. At this time, the only legislation to be introduced to make permanent certain CARES Act amendments is that which increased the debt limit for debtors under subchapter V of Chapter 11 to $7.5 million.
As a result of the sunsetting of these CARES Act provisions as related to the Bankruptcy Code, many debtors will be affected from no longer having the safe harbor of these provisions during the pandemic. The following provisions are no longer applicable as of March 27, 2022: (a) COVID-related payments, including recovery tax rebates and child tax credit payments, are excluded from current monthly income (CARES Act § 1113(b)(1)(A); 11 U.S.C. § 101(10A)(B)(ii)(V)); (b) COVID-related payments, including recovery tax rebates and child tax credit payments, are not disposable income (CARES Act § 1113(b)(1)(B); 11 U.S.C. § 1325(b)(2)); and (c) Chapter 13 debtors may seek plan modification, if the plan was confirmed before March 27, 2021 and the debtor is experiencing a COVID-related hardship, that would extend plan payments for up to seven years after initial payment on original plan was due (CARES Act § 1113(b)(1)(C); 11 U.S.C. § 1329(d)(1))..
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