What Happens to My Bankruptcy Case During the Coronavirus Pandemic?

Over the course of the last few weeks, it has become clear that the consequences of the COVID-19 (“Coronavirus”) pandemic are far reaching. In order to protect the health and safety of individuals, certain precautionary measures must be implemented.

Federal courts, including bankruptcy courts, have continued to operate subject to significant limitations. So far, here in Western New York, most of the proceedings, primarily motions and conferences, are going to be handled via telephone and/or video conferencing. Since bankruptcy relies on electronic filing, new Chapter 7 and Chapter 13 bankruptcy cases can still be filed.

Effective immediately, all in-person Chapter 7, 12, and 13 section 341 meetings (meetings of the creditors) scheduled through April 10, 2020, have been continued until a later date to be determined. Section 341 meetings may not proceed during this period except through telephonic or other alternative means not requiring personal appearance by debtors. Appropriate notice will be provided to attorneys and parties in accordance with bankruptcy law and rules for any telephonic meetings scheduled during this period.

I think that the situation is very fluid at this time, and may change depending on the circumstances. I will continue to update this post with new information as it becomes available.

Who Qualifies For Bankruptcy?

Do I qualify to file a bankruptcy?  This is one of the most common questions I am asked as a bankruptcy lawyer when I meet with debtors who are hoping to obtain relief from their debts in bankruptcy court. My answer is usually yes, since almost everyone qualifies for bankruptcy under either Chapter 7 or Chapter 13 of the Bankruptcy Code.

I think that this question is often asked because of common myths and misinformation that people hear with regard to what bankruptcy is and what it does for the debtor.  Unfortunately, there is much misinformation being passed around.  It is rare that someone would not qualify for a filing under either chapter of the Bankruptcy Code. If there are horror stories, they typically arise out of situations where someone did not disclose accurate information to the bankruptcy court.

In order to qualify for a bankruptcy relief, the debtor needs to have a reason to file.  The primary reason for most debtors is their inability to pay their debts.  Whether or not the debtor owns assets is not a a consideration in qualifying to file for bankruptcy.  Under New York’s bankruptcy exemptions, a single filer can protect $50,000 in home equity, $2,400 of equity in the vehicle, and there are other exemptions available for other classes of assets.

There are no minimal requirement as to how much debt a debtor must have before filing, nor does this debt has to be reduced to a specific figure.  Also, if you are filing Chapter 13 Bankruptcy, you are not limited with respect to the property that you can own, but the amount of property may be a factor in the amount of payments under the plan. While there are maximum limits of the amount of debt that can be discharged under either Chapter 7 or Chapter 13, the vast majority of debtors will not even approach them. In Chapter 7, there are no maximum debt limits. As a result, that Chapter 7 Bankruptcy is available to the debtors regardless of how much debt they owe, and its availability is only limited by the means test.  In Chapter 13, you may not have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.