The Coronavirus Aid, Relief, and Economic Security or the “CARES Act” passed by Congress last week to address the current COVID-19 crisis contained certain changes to the Bankruptcy Code. These changes became effective on April 1, 2020, and primarily are found in Section 1113 of the CARES Act. There do not appear to be any specific provisions in the CARES Act impacting auto lenders. Below are the highlights.
Modification of Confirmed Chapter 13 Plans
Under the Bankruptcy Code, repayment under a Chapter 13 plan could not extend more than 60 months. Under the new law, for a limited period of time, a confirmed Chapter 13 plan can be modified to extend repayment up to 84 months.
Exclusions from Income
In addition, the Bankruptcy Code is amended to exclude certain benefits related to COVID 19
Section 4022 of the CARES Act provides a temporary moratorium on real estate foreclosures is in place under circumstances.
Other Bankruptcy Law Changes
For the new Small Business Reorganization Act, Chapter 11 cases filed under the so-called subchapter V, raises the eligibility debt ceiling to $7,500,000, but only for new cases filed between March 28, 2020 and March 27, 2021. The old debt ceiling was $2,725,625, and this provision sunsets in one year (e.g. effective March 28, 2021, the old debt ceiling returns)
Dennis LeVine focuses his statewide practice on bankruptcy litigation and creditors’ rights. Dennis is one of only seven attorneys in Florida to be Board Certified in both consumer bankruptcy law and business bankruptcy law by the American Board of Certification (ABC).