COVID 19 has changed a lot of things for a lot of people. If you have a Chapter 13 Bankruptcy plan that was confirmed prior to March 27, 2020, you may have the ability to extend your plan. Under the CARES ACT, Congress extended the maximum Chapter 13 plan to 84 months from 60 months. But this only applies to those people who already have Chapter 13 plans confirmed as of March 27, 2020. Also, there is a sunset provision in the Act. You must have a plan confirmed by March 27, 2021 to qualify for the extension.
Let’s take an example of where this new Act provision extending a Chapter 13 Bankruptcy plan might be quite beneficial to someone. Many people will leave their plans as is, no changes. But for some, this new Chapter 13 Bankruptcy plan extension is a real blessing. Take the case where debtors want to keep their home and in order to do so they were required to make a plan payment of $1,000.00 per month for 60 months. It is a real struggle for this young couple to make this plan payment so the extension of the plan to 84 months will result in a lower payment for this couple. We could now, in theory, reduce their payment to $715.00 a month which would free up $285.00 for gas and groceries etc.
For those of you who wish to take advantage of this opportunity to extend your plan, reach out to your bankruptcy attorney immediately. As stated above, the deadline to have a plan confirmed by the bankruptcy court is March 27, 2021. If you plan to leave your plan as is, you need to do nothing except stay in compliance with your current plan.
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