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CARES Act Changes to the Bankruptcy Code

The CARES Act made significant changes to the bankruptcy code that can help you now for the next year.
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CAREs Act Changes Definition of Current Monthly Income for Means Test
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CAREs Act Changes to Official Means TestForms 122A-1, 122B, and 122C-1

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Official Means Test Forms 122A-1, 122B, and 1

"Current Monthly Income" for Bankruptcy Means Test Expressly Excludes CARES Act Payments -- Line 10 Modified


The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), Pub. L. No. 116-136, 134 Stat. 281, made significant changes to the bankruptcy code that can help you now and in the years to come.

Here's a few things you need to know about filing for bankruptcy in the age of pandemic government programs aimed at keeping the economy flowing.

"Current Monthly Income" for Bankruptcy Means Test Expressly Excludes CARES Act Payments -- Line 10 Modified

Official Means Test Forms 122A-1, 122B, and 122C-1
(Median Income Test for chapters 7, 11, and 13)

Official Forms 122A-1, 122B, and 122C-1 are amended in response to the enactment of 

That law modifies:

  • the definition of “current monthly income” in §101(10A) and
  • the definition of “disposable income” in §1325(b)(2)

....to exclude...

  • payments made under the Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019 (COVID-19).”

Each form is modified to expressly exclude these amounts from line 10.

These amendments will terminate one year after the date of enactment of the CARES Act.

Contents:
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<   FAQ Contents

CAREs Act Changes to Official Means TestForms 122A-1, 122B, and 122C-1

The federal government has modified bankruptcy law one major way that Significantly affects the bankruptcy means test.

Specifically, they have modified the definition of current monthly income to exclude any payments under the CARES act.

This means that line 10 of the means test Form #1, Current Monthly Income, is modified to expressly state that CARES Act payments are not included in the definition of current monthly income. This change last for one year from the date the CARES act was passed.

  1. Official Forms 122A-1, 122B, and 122C-1

2020-04 COMMITTEE NOTE Official Forms 122A-1, 122B, and 122C-1 are amended in response to the enactment of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), Pub. L. No. 116-136, 134 Stat. 281. That law modifies the definition of “current monthly income” in §101(10A) and the definition of “disposable income” in §1325(b)(2) to exclude “payments made under the Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019 (COVID-19).” Each form is modified to expressly exclude these amounts from line 10. These amendments will terminate one year after the date of enactment of the CARES Act.

- source U.S. Courts.gov


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<   FAQ Contents

Do I have to declare my CARES Act benefits as current income?

Do I have to claim my cares benefits as current income?

answer is no. CARES Act benefits are expressly excluded from the definition of current income under bankruptcy code section blah blah blah and under the bankruprcy means test Official Form 122-A Line 10


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CAREs Act Changes to Official Means TestForms 122A-1, 122B, and 122C-1

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