President Biden Extends Parts of the CARES Act

 

President Joe Biden signed the “COVID-19 Bankruptcy Relief Extension Act” into law to extend provisions providing financially distressed consumers and small businesses greater access to bankruptcy relief. The legislation extended personal and small business bankruptcy relief provisions that were part of the CARES Act through March 27, 2022. 

The is significant, especially for small businesses electing to file under subchapter V.  See H.R. 1651; however, the “Consolidated Appropriations Act of 2021” (CAA) was not extended.

Other bankruptcy provisions extended to 2022 by the COVID-19 Bankruptcy Relief Extension Act include:

• Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.
• Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.
• Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications, including extending their payments for up to seven years.

If you find yourself either experiencing financial difficulties, or foresee the possibility of financial difficulties, as a result of the pandemic, you should seek the advise of a competent bankruptcy professional in your area that can help you come up with a financial game plan moving forward.

IRS Extends Tax Filing Deadline For 2020 Taxes

The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days. 

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline. See the following articles:

https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline

https://www.bloomberg.com/news/articles/2021-03-17/irs-plans-to-delay-tax-deadline-to-mid-may-after-chaotic-year

Covid 19 Foreclosure Moratoriums Extended

 

FORECLOSURE MORATORIUMS

The vaccine rollout is proceeding, but the economic effects of the pandemic are still being assessed.  There is some relief for borrowers whose mortgages are backed or owned by the federal government. The moratorium on foreclosures imposed by the Federal Housing Administration (FHA), Veterans Administration, the U.S. Department of Agriculture (USDA), Fannie Mae, and Freddie Mac will remain in effect until June 30, 2021.

 

The bad news is, eventually the mortgages will have to be paid up.  While it is not known what the government will do regarding the mortgage arrears, some attorneys are anticipating an avalanche of foreclosure filings which may lead to an avalanche of bankruptcy filings.  

 

Keep in mind, the moratorium is not mortgage relief.  Once the moratoriums end, the mortgage arrearage will have to be paid.  You may want to call a consumer advocate attorney in your area to see what options you may have.