April’s one-month increase in delinquent home mortgages was the largest in U.S. history. The new mortgage forbearance law is a major reason.
Bankruptcy Filings Poised to Increase
Photo by Melinda Gimpel on Unsplash Consumer bankruptcy filings edged up in 2019, increased more this March, sharply declined in April, but are very likely to shoot up now. In the last two weeks three major retailers filed Chapter 11 business bankruptcy: J. Crew, Neiman Marcus, and J.C. Penny. Total business Chapter 11 reorganizations were up 26% in April 2020 … Read More
New 7-Year Amended Chapter 13 Plans
Photo by Kelly Sikkema on Unsplash The new coronavirus law temporarily allows amend Chapter 13 plans to extend to a 7-year period instead of the current 5-year maximum. Last month we described the changes to bankruptcy law made by the coronavirus CARES Act enacted on March 27, 2020. One of those changes is the ability to extend the length … Read More
Protect Your $1,200 from Bank Setoff
Photo by Ferran Fusalba Roselló on Unsplash If you owe your bank or creditor union fees on your account, or other debts, it may be able to pay itself out or your $1,200 relief payment. Our last blog post was about whether your creditors can seize the $1,200 (or so) pandemic relief payments. Today’s is about one specific class of … Read More
Protect Your $1,200 from Creditor Collection
Your $1,200 pandemic relief payment from the IRS is subject to creditor collection, if you have a garnishment order on your bank account. Our blog post four weeks ago was about the $1,200 pandemic relief payments going out to most U.S. adults. The CARES Act explicitly protected these payments from seizure for certain governmental debts. Generally, the payments can’t be … Read More
Student Loan Payments Suspended
The new COVID-19 law temporarily suspends most, but not all, federal student loan monthly payments, accruing interest, and debt collections. The 880-page Coronavirus Aid, Relief, and Economic Security Act (“CARES”) has 4 pages of help for certain student loan borrowers. Section 3513 of CARES. It provides meaningful albeit temporary help, for those who qualify by having the right kind … Read More
Coronavirus Law Changes to Consumer Bankruptcy
New $2.2 trillion coronavirus relief law makes modest but potentially important temporary changes to both Chapter 7 and Chapter 13 law. If you’re thinking about filing a Chapter 7 “straight bankruptcy” case, the new CARES law may help, at least slightly. If instead you’re thinking about a Chapter 13 “adjustment of debts” case, the new law helps in more … Read More
New Greatly Enhanced Unemployment Benefits
A series of new very beneficial unemployment benefits are coming from the massive coronavirus relief law—much more money for many more people. Our blog post last week was about the emergency $1,200 Economic Impact Payment that’s “rapidly” coming to most American adults. (Plus $500 for each qualifying dependent child.) For updates on this payment since then, see the … Read More
U.S. Treasury Sending $1,200 Relief Payments
The U.S. Treasury is sending money to most adults “as rapidly as possible,” $1,200 if you make less than $75,000, plus $500 per dependent. On Friday (March 27) Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act. It’s also called the CARES Act, better known as the massive $2.2 trillion pandemic relief … Read More
IRS Postpones Tax Deadline to July 15
The IRS just postponed the April 15 deadline BOTH to file your income tax return and to pay the taxes, for individuals AND businesses. IRS Income Tax Return Deadline Postponed Responding to the COVID-19 pandemic, the IRS has postponed the deadline to file federal income tax returns by 3 months. This was announced (on Twitter, no less!) on … Read More
Driving While Intoxicated Personal Injury
If you owe someone for injuring them by unlawfully driving while intoxicated, that debt would be a priority debt in bankruptcy. So what? Priority Debts For many weeks our blog posts have been considering how bankruptcy deals with “priority” debts. Examples of these special debts that we’ve covered include child/spousal support, income taxes, and wages owed employees. Sections 507(a)(1),(4), … Read More
Don’t Pay a Debt to a Prior Employee
If you operate a business, will be filing bankruptcy, and prefer not to pay a prior employee, take action so that debt is not a priority debt. Imagine that in the near future you’re closing down a business and filing bankruptcy. You owe an employee or independent contractor back wages or commissions. But you’d rather not pay that debt … Read More
Pay Employee Debt with Chapter 13
If you’d like to pay a prior employee or independent contractor recent wages or commissions, Chapter 13 can help you prioritize that. Our last three blog posts have been about debts you owe to your employees or independent contractors. Specifically, we discussed the conditions under which past wages, commissions, or benefits qualify as a“priority” debt. These posts covered: the … Read More
Pay Your Debt to an Employee
If you operate or used to operate a business and are considering filing bankruptcy and would like to pay an employee, the law can help you. Our last two blog posts were about debts owed to your employees or independent contractors. Specifically we discussed the conditions in which past wages, commissions, or benefits qualify as “priority” debt. Two weeks … Read More
Debt for Independent Contractor’s Commissions
A debt for an independent contractor’s commissions can be a priority debt, but only if the contractor meets an extra, tough condition. Our last blog post was about conditions in which wages, commissions, or benefits owed to an employee are “priority” debt. But what if your debt was not to an employee but an independent contractor? Especially in today’s … Read More