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)
- “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.
You may also be interested in:
The CARES Act made an important change to the means test form to indicate that payments under the CARES act are NOT included in determining median income. This could be a great boon to those thinking of filing.
Congress made a few important changes to the bankruptcy laws. Here’s a summary of what’s changed.