Like every other aspect of our lives, the coronavirus will create complications for the bankruptcy process. You should ask an experienced bankruptcy attorney the following questions before you file your case:
What if I Have New Debts after I file bankruptcy?
The day you file bankruptcy determines what debts are part of your case. Debts that existed before you file are potentially dischargeable. However, debts that arise AFTER you file are NOT part of the case and will NOT be discharged. This means you should consider the likelihood that you may lose your job as the virus spreads and, as a result, incur new debt. Therefore, if your circumstances will permit you to delay filing, then (in my opinion) it would be wise to hold off filing until the current crisis has passed.
Will the Bankruptcy Court Take my Stimulus Check if I file?
As of the writing of this article, the Senate just passed a stimulus bill that promises to pay most Americans $1,200 per adult and $500 per child. Like debts, any asset you have or have a RIGHT to before the day you file is part of the bankruptcy and is subject to be taken in a Chapter 7. However, you may be able to “exempt” your stimulus check (which means you could keep it). Exemption law is a complicated issue and varies from state to state. As such, I can’t give an answer to this question that will apply to everyone. Also, I haven’t seen the final stimulus law yet and all the provisions it may contain. Bottom line, discuss this issue with an attorney to see what is best for your particular circumstances.
Will the Virus Complicate the Filing of My Case?
Yes, and it already has. Currently, the courts are shutting down, postponing hearings and trying to come up with systems to conduct hearings without gatherings of large numbers of people. There is also the chance that you or your attorney may get the virus and would have to be quarantined for 14 days. All of these issues can be overcome, but they could cause delays in the processing of your case.
We’re still in the early stages of the pandemic and it remains to be seen if the concern surrounding it is reasonable or not. However, your decision as to when to file bankruptcy should consider the potential implications of the virus and the impact it will have on the economy.