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​Roseville, CA Coronavirus (COVID-19) Related Bankruptcy Attorney

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In the best of economic times, many people and small businesses struggle with financial problems. Now, with California under “shelter-in-place” directives due to the ongoing pandemic, many financial hardships have intensified. Fortunately, bankruptcy remains a vital tool for those suffering economic stress, even during the coronavirus.

If your family or business is overwhelmed by significant debt, our experienced Roseville, CA coronavirus related bankruptcy attorneys can help you through these challenging times. To schedule a confidential consultation with the Bankruptcy Group, call us at (800) 920-5351. We have conveniently located law offices in Folsom and Roseville.

Filing for Bankruptcy After Coronavirus in Roseville, CA

The reasons people file for bankruptcy are nearly as varied as the number of cases filed. Often, seemingly uncontrollable debt overwhelms someone. This could occur due to the loss of a job or a significant reduction in income. Sometimes an unexpected medical emergency depletes a family’s savings. In an attempt to keep their heads above water, people turn to credit cards and personal or payday loans. Once the cycle of borrowing to pay debt begins, the chances of climbing out of the economic pit decreases. Soon collection lawsuits commence, or a foreclosure complaint is filed. Our experienced Roseville attorneys, even during the COVID-19 pandemic, could help relieve your financial burdens through filing for bankruptcy.

Many small businesses throughout Roseville and California have financial difficulties when the economy is doing well. One or two poor weeks of revenue or a disruptive employee could easily place a small company on a finical precipice. If the current coronavirus pandemic put your struggling business in more severe debt, call our seasoned bankruptcy attorney.

As COVID-19 continues to hurt small businesses and keeps individuals out of work, bankruptcy remains a useful tool to eliminate debt or restructure a business’s financial liabilities. Individuals or families could file for Chapter 7 or Chapter 13 to obtain a fresh start, while a business in need could turn to the protections provided by Chapter 11.

The Coronavirus Aid, Relief, and Economic Security Acts’ Effect on Roseville Bankruptcy Cases

Recently, the House and Senate passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide financial relief and an economic stimulus for a country suffering the adverse consequences of COVID-19. Many of the provisions of the CARES Act are aimed directly at amending the United States Bankruptcy Code to help debtors during this crisis.

Chapter 7 and Chapter 13 Bankruptcies During COVID-19

The CARES Act temporarily amends the United States Bankruptcy Code, providing additional assistance to debtors struggling through the economic downturn created by the coronavirus.

Now, if a Chapter 13 debtor is experiencing a “material financial hardship” as a direct result of COVID-19, the amendments provide a remedy for missed or insufficient trustee payments. A debtor who is behind in their monthly payments could now petition the court for a bankruptcy plan modification. More significantly, the modified plan could extend the payments 24 months beyond the standard 60-month limit. In many cases, this will allow a debtor with a reduced income to lower their payment to a manageable amount. Because the CARES Act does not strictly define what would constitute a “material financial hardship,” the assistance of our skilled Roseville bankruptcy attorney could be vital in taking full advantage of the amendments.

Whether you are eligible to file Chapter 7 or are required to pay unsecured creditors in Chapter 13 is greatly dependent on your household income. Income in bankruptcy is defined very broadly. In addition to the money a person earns through employment, the bankruptcy code also includes tax refunds, gifts, gambling winnings, and financial contributions as income. Under the CARES Act, stimulate payments are not included under the definition of income and will have no adverse effects on whatever chapter bankruptcy you file.

The CARES Act and Chapter 11 Bankruptcies Filed in Roseville, CA

The CARES Act made significant amendments to the Small Business Reorganization Act of 2019 (SBRA) The SBRA, which went into effect on February 19, 2020, modified parts of the Bankruptcy Code to allow small businesses an easier and more cost-effective way to reorganize through Chapter 11.

  • The CARES Act amended the debt threshold, allowing Individuals or small businesses with total debt $7.5 million or less, consisting of at least 50% commercial debt, the ability to file under the SBRA provisions.
  • Many of the deadlines typically associated with Chapter 11 were relaxed or removed.
  • Debtors filing under the SBRA provisions will not be required to pay quarterly U.S. Trustee fees.
  • SBRA cases will not subject the filing business to a creditors committee, reducing the risk of disputes arising during the proceeding.
  • Typically, when a company files Chapter 11, the court appoints a trustee to manage the operations of the business. Under the amended provisions, a trustee will be appointed in a Chapter 11 proceeding as a supervisor to assist the debtor through the process.
  • A Debtor in an SBRA is the only entity eligible to file a reorganization plan. In a standard Chapter 11 case, creditors are allowed to file competing plans.
  • In Chapter 11 cases, a plan confirmation requires approval from at least one impaired class of creditors. Under the CARES Act, a plan could be confirmed with a rejection filed by all impaired classes.
  • Administrative expenses are now permitted to be paid through the life of the reorganization plan.

Call Our Roseville, CA Coronavirus Related Bankruptcy Attorney for a Consultation

Despite statewide “shelter-in-place” directives and limited court operation, bankruptcy remains one of the best available options for eliminating overwhelming debt or restructuring financial obligations. While COVID-19 might make the process a little more challenging, we have the skill and depth of knowledge to guide you through this unusual time. Our experienced Roseville, CA coronavirus related bankruptcy attorneys are dedicated to assisting people facing a financial crisis during the pandemic. Call the Bankruptcy Group at (800) 920-5351 for a free, confidential consultation.

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