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Item Description – A deal was struck between White House and Senate leaders on Wednesday, March 25th, allowing the coronavirus stimulus package to move forward. The updated proposal is intended to boost the economy by distributing $2 million along with tax rebates and four months’ worth of expanded unemployment benefits, among other provisions.The funds are needed in many areas as people across the country lose jobs. Non-essential businesses are shut down, preventing revenue from coming in to support the workforce. Grocery stores, pharmacies, and other operations deemed essential are still open, but many have made significant changes to manage the coronavirus risk.Bankruptcy is a hot topic in the finance sector right now, and for good reason. Many have already filed with experts projecting many more in the coming months.There were over 770,000 bankruptcies filed in 2019, according to MarketWatch. That’s less than half of those filed during the 2010 Recession, which peaked at 1.6 million. Overall, bankruptcy filings had been on a downward trend, hitting a decade low in 2018.That sounds like good news, but not entirely. While there were fewer bankruptcies in recent years, the average household debt has grown. The Federal Reserve Bank of New York reported that Americans held $14.15 trillion in household debt as of the fourth quarter of last year.In the short time that the coronavirus has spread across the world, millions of people have found themselves out of a job. Many companies are making no revenue, especially those that relied heavily on a brick-and-mortar presence. A record 6.6 million people in the U.S. have filed first-time jobless claims as of the third week in March.Changing Bankruptcy Code During COVID-19Along with issuing checks to adults around the nation, the stimulus bill also outlined changes to bankruptcy code. The package includes forgivable loans that can be issued to small businesses and a $1,200 payout to anyone making up to $75,000 or $2,400 for couples making under $150,000. As far as bankruptcy filings, the stimulus package outlines the following:Recovery rebates, or direct checks, do not count toward income that would normally be included in a “means test”. The test is required to determine eligibility when filing for Chapter 7 bankruptcy.Recovery rebates are also not counted as disposable income, which can be applied to credit card debt and other debts in Chapter 13 bankruptcy.Relief for anyone who was already under a Chapter 13 repayment plan and experiencing COVID-19 related financial difficulties. A year-long window is given to change repayment terms. Repayment timeframes can be extended by up to two years. These changes will help people who need to qualify to file for bankruptcy as well as those who are trying to remain in good standing while paying off an existing payment plan. The provisions remain in effect until March 27th or one year after Trump signed the bill.Will the COVID-19 Stimulus Bill Be Enough?While there’s still uncertainty about all the effects that the coronavirus pandemic will have on communities and the greater economy, one thing is certain. It will have a strong and unavoidable impact. Leaders must take steps now to reduce potential hardships and pad the country for the blow that will come in the form of lost jobs and higher bankruptcy filing rates.No one has all the answers, but these changes are a start. According to John Rao, a staff attorney for the National Consumer Law Center, the bankruptcy provisions are “really positive changes.”  They expand access to Chapter 7 protections without putting up roadblocks to utilizing recovery rebates.Debtors can use direct checks and be granted extensions on payment plans, rather than being forced to choose one or the other.Most people are not going to hurry and file for bankruptcy right now but will likely do so in the near future. According to MarketWatch, several attorneys reported that they are getting ready for cases to ramp up. Many have received calls from existing Chapter 13 bankruptcy clients who are concerned about falling behind on payment plans.There are no easy answers in all of this. Health and preserving life should be a priority, but we cannot ignore the financial woes that people now face. “That’s where it’s freaking people out,” explained Nicole Anderson, a bankruptcy attorney in Forest Lake, Minnesota. She has been giving clients the best advice she possibly can during the pandemic.Anderson recommends paying at least the minimum sum. “For now, let’s just stay in, stay safe and get through and we can always fix it in the couple months.”The non-profit website has experienced an increase in traffic as visitors arrive to learn more about filing Chapter 7 petitions. The site counted nearly one million visitors last year. Their COVID-19 content posted in mid-March received 28,000 hits, according to co-founder and CEO Rohan Rohan Pavuluri.Federal district and bankruptcy courts around the U.S. have issued orders to try to temporarily pause or minimize in-person interactions in the courtroom. Many are holding sessions over the phone or postponing anything that’s not an immediate concern.Courts still accept case payments, with minimal staff on hand to open mail and process transactions. Most are still trying to adapt to the new “normal” by looking for ways to have hearings and continue operating without increasing the coronavirus risk.Filing for Bankruptcy During the Coronavirus PandemicLaws and eligibility have changed in the wake of coronavirus. Many people are just learning about how bankruptcy works during a time when they may need to use it. The best way to protect yourself is to speak to a bankruptcy lawyer. They can review your situation and advise you on how to proceed to legally insulate yourself against the economic downturn. The first step is getting in touch with the right legal professional. Go to Bankruptcy Directory now to get in contact with qualified bankruptcy attorneys who are accepted clients in your area.

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