Our Las Vegas Bankruptcy Attorney Discuss Changes in Filing Bankruptcy Since The Coronavirus Outbreak
The coronavirus pandemic has upended so many parts of society, and bankruptcy hasn’t been the exception. Because of gathering size limitations, many court proceedings are currently suspended or have been changed to telephonic, or remote, appearances. That doesn’t mean that bankruptcy filings can simply stop. Bankruptcy provides protections that help people maintain their ability to get to work, keep food on the table, and rely less on public assistance.
From an economic standpoint, Las Vegas has been one of the areas hit hardest by the coronavirus pandemic. Nevada continues to report unemployment levels that are higher than the rest of the country. It goes hand in hand that bankruptcy courts in Nevada have taken precautions to prepare for litigants filing bankruptcy due to the pandemic.
Here are some of the ways that bankruptcy procedures have changed in Las Vegas, Nevada in response to the coronavirus pandemic.
Pending Case Slowdowns:
If you filed your bankruptcy petition in the time period immediately leading up to the pandemic, your case will probably progress more slowly than cases in the past. The pandemic created such a delay in 341 Meetings of Creditors that some courts are still recovering and catching up.
Prolonged work absences:
One way COVID-19 is affecting American families’ finances is that family members are required to self isolate and quarantine after traveling or being exposed to or infected with the virus. For those without adequate paid time off accrued, this means either dipping into savings or relying on credit until they can return to work. Be aware that when you file bankruptcy, only debts from before the filing date will be discharged. Even if you are struggling with debts now after a coronavirus-related layoff, it may be preferable to wait until you find new employment so that any additional debt you incur is discharged as well.
Because 341 Meetings of Creditors and other hearings have been delayed, cases being discharged will be delayed as well. While a Chapter 7 bankruptcy is eligible for discharge 60 days after the 341 Meeting of Creditors, discharge isn’t automatic and probably won’t occur exactly on the 61st day. It could still be days or weeks before the court is able to process your case and send out your discharge. The court may mail you updates about your case if it is still pending, or your trustee or attorney may get in contact with updates.
Chapter 13 hearings:
In a Chapter 13 case, you will not only be required to attend a 341 Meeting of Creditors, but also a plan confirmation hearing, and other hearings if necessary. Most of these miscellaneous hearings can be held over the phone, so they are still being scheduled.
Keep your stimulus check:
If you recently completed a bankruptcy before the pandemic, or if you are in an active Chapter 13 should additional stimulus checks be issued, you may be concerned about whether you need to surrender these payments to the trustee like other post-bankruptcy payments like tax returns and lottery winnings.
Chapter 13 hardship modification or discharge:
If you lose your job due to coronavirus, you should petition the court for a hardship-based modification or discharge. A modification would lower your monthly plan payments to an amount you can afford on your reduced income. A hardship discharge, while more rare, will render your case complete and your debts discharged.
Pandemic assistance won’t affect your bankruptcy calculations:
If you lost our job and received increased unemployment benefits, these won’t be included in your income calculations for qualification purposes. This means that if your income actually increased with pandemic unemployment benefits, you won’t be disqualified from Chapter 7 bankruptcy.
Keep making your Chapter 13 payments, if possible:
Your Chapter 13 payment plan may include vital payments like your mortgage and child support. If you have the money in your bank account, you should continue to make your Chapter 13 payments despite the pandemic. However, millions of Americans have lost their jobs and applied for unemployment due to the spread of coronavirus. Many Chapter 13 bankruptcy trustees were instructed not to dismiss cases for a first missed payment when the pandemic first spread to the United States.
If you are considering filing, know that many bankruptcy attorneys offer phone consultations:
While many people find it easier to discuss their potential bankruptcy case in person, it may simply not be worth the risk or extra time for you. Meeting your attorney telephonically may actually give you a better opportunity to prepare yourself before your consultation. Access to your personal computer means you can give your Henderson attorney more accurate information about your income, assets, and other important bankruptcy factors without needing to print out hundreds of pages of documents.
The Automatic Stay will still go into effect when you file your petition
While there have been delays in the bankruptcy courts due to the pandemic, you can still electronically file your case and the Automatic Stay will still go into effect once your petition is filed. The Automatic Stay protects you from collection efforts by your creditors such as home foreclosure, vehicle repossession, and wage garnishment. The Automatic Stay will continue to protect you until your case is discharged, with a few exceptions. If you fail to list any creditors on your creditor mailing matrix, they won’t receive a notice of your bankruptcy filing and may proceed with collection efforts because they are unaware of the Automatic Stay. If your bankruptcy is dismissed, the protections of the Automatic Stay end. If you refile your case after a dismissal too frequently, your Automatic Stay protection may be reduced to 30 days. Your creditors may also file what is known as a Motion for Relief from the Automatic Stay. If the court grants this motion, the creditor can proceed with their chosen collection method despite the Automatic Stay remaining in place.
No in person 341 Meetings of Creditors:
Both Chapter 7 and Chapter 13 filers are required to attend a 341 Meeting of Creditors. Bankruptcy trustees typically have multiple hearings scheduled at the same time, and all of each bankruptcy filer’s creditors have the right to appear. If these hearings continued to be held in person, every day in the courthouse would be a gathering of more people than recommended by the CDC. Therefore, 341 Meetings of Creditors are being held telephonically. You should familiarize yourself with the software your trustee uses (probably Zoom) well in advance of your hearing.
You can complete other steps of your bankruptcy remotely, too:
Your Henderson attorney should have a secure portal for you to upload your documents so that you don’t have to go anywhere to mail or drop off paperwork necessary for your bankruptcy petition. Your credit counseling courses will be taken online. Your attorney can even file your petition online.
Declaring Bankruptcy May Cure Your Pandemic Blues
If you’ve been impacted by the pandemic and are wondering if bankruptcy is a good option for you, our office is here to help. The dedicated staff and attorneys at Henderson Bankrupcty Lawyers have the knowledge, experience, and compassion to make sure your bankruptcy is as painless as possible. To learn more about the bankruptcy process and a strategy for when your case should be filed, call today for your free consultation.
Henderson’s Top Bankruptcy Law Firm
1489 W. Warm Springs Rd., Ste. 110
Henderson, NV 89014
Email: [email protected]