Bankruptcy Code Amendments in the CARES Act

By |2020-08-26T11:44:33-05:00April 29, 2020|

The recently passed CARES Act provides significant assistance to small businesses that may be considering bankruptcy due to financial losses caused by the COVID-19 pandemic.  The new law expands the debt limits threshold from $2,725,625 to $7,500,000, thus allowing many more individuals and businesses to qualify for expedited bankruptcy relief under the Small Business Reorganization Act. Bankruptcy filers will also be able to exclude any economic relief they receive from the federal government as a result of the COVID-19 pandemic so as not affect their eligibility to file. Lastly, those operating under a confirmed Chapter 13 plan, assuming proof of “material financial hardship,” can extend their plan up to seven years.