[CLBS] FW: Covid Stimulus Bill Changes Bankruptcy Code

[Patrick Geile]

Good Morning,

Below are some important changes to the SBRA and chapter 13’s among others.  Thanks Judge Pappas for forwarding this on.

Colleagues, Our Legislative Committee reports that the stimulus bill that will hopefully get passed this afternoon by the Senate contains changes to

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Colleagues,
Our Legislative Committee reports that the stimulus bill that will hopefully get passed this afternoon by the Senate contains changes to the Bankruptcy Code to assist small business debtors and all individual debtors. The House of Representatives will have to take up the bill shortly after the Senate passage; however, the Committee understands that while the House may want to add a liberalized homestead provision, the leadership is on board with these changes.

Here is a summary of those provisions, all of which sunset after one year:

• Amends the Small Business Reorganization Act to increase the eligibility threshold to file under subchapter V of chapter 11 of the U.S. Bankruptcy Code to businesses with less than $7,500,000 of debt.

• Amends the definition of income in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.

• Clarifies that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.

• Explicitly permits individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.

Laurel Isicoff
NCBJ 2019-2020 President



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