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.

Another Remedy For A Failing Chapter 13 Bankruptcy- Amending Bankruptcy Plan

I have recently written about a situation where the debtor’s Chapter 13 Bankruptcy plan is failing for the reasons beyond the debtor’s control.  One potential way to resolve this problem was to seek a hardship discharge.  Today, I will describe another way of addressing this problem.

In a typical Chapter 13 Bankruptcy case, the debtor has to propose a monthly payment to repay his/her creditors over either 36 or 60 months.  The length of the plan in either situation is substantial and carries with it some risks for the debtor.  The primary risk is a substantial change in the debtor’s income, leaving him/her unable to make monthly payments approved by the bankruptcy court.

When a confirmed Chapter 13 bankruptcy plan is failing, the debtor should start thinking about having the plan modified in order to remain in Chapter 13 Bankruptcy.  Under the applicable provisions of the Bankruptcy Code,  the plan can be modified and the debtor can seek a change in the amount of the monthly payment or the length of the plan to fit the current circumstances.

Section 1329 of the Bankruptcy Code provides that the plan can be modified to:

(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;

(2) extend or reduce the time for such payments;

(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim other than under the plan; or

(4) reduce amounts to be paid under the plan by the actual amount expended by the debtor to purchase health insurance for the debtor.

If you are unable to make a payment on the plan on time, you should immediately contact your bankruptcy lawyer to determine if the plan can be modified.  In order to modify the plan, the debtor must make a motion for modification. Such motion must show to the bankruptcy court new payments using documentation of the new income figures.

The advantages in keeping your Chapter 13 Bankruptcy include keeping the automatic stay in place;  getting a discharge, and not incurring additional attorneys fees for converting to a Chapter 7 Bankruptcy.  If the bankruptcy remains in place, your creditors will not be able to sue you or begin collections activities.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, 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.

Emergency Bankruptcy Filing – It Can Be Done

Late at night, most people are sleeping.  However, sometimes circumstances arise when someone needs to file either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy before the stroke of midnight, in the middle of the night, or early in the morning.  Therefore, occasionally I file bankruptcy petitions late at night.

Sometimes, there are clients who come to me at the very last minute, when there may just be hours to spare before a scheduled foreclosure sale.  In such cases, the bankruptcy petition needs to be filed as soon as possible because the minute the petition is filed, the “automatic bankruptcy stay” goes into effect, effectively preventing the sale from going forward.  Lawyer’s ability to file an emergency bankruptcy cases is an important part of effective bankruptcy representation.

The reason I am able file bankruptcy petitions in the middle of the night is because all of the bankruptcy filings are done by electronic case filing (otherwise known as “E.C.F.”).  By using E.C.F., the petitions and other bankruptcy documents are filed over the internet electronically, directly into the bankruptcy court’s computers.  As a result, I can file a bankruptcy petition at any time.

The local rules do not require that the debtor file all of the supporting schedules at the time the case is initially filed.  The case can be commenced by filing just the two-page bankruptcy petition together with a list of creditors and their addresses either in the form of the matrix or by filing the schedules of creditors.  The debtor must also pay the filing fee.

The local rules permit the debtor to file the remaining schedules and forms within the next few days.  If the remaining schedules and supporting documents are not filed during the applicable time periods, the Bankruptcy Court has the right to automatically dismiss the case.  One requirement of a normal bankruptcy filing that cannot be waived in an emergency filing is the consumer credit counseling course. However, with consumer credit counseling courses available over telephone and internet, an emergency course provider can be found and a course can be completed at almost any time of day and night.

I prefer not to file emergency petitions, but sometimes it is necessary, and it is a part of the service I offer.   Sometimes, I receive calls from the debtors who believe their house is about to be sold at a foreclosure sale.  However, many of them confuse a motion return date in the foreclosure proceeding with the actual sale date.  Before preparing an emergency filing, I always verify that there is a need to file bankruptcy as soon as possible.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, 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.