Bankruptcy in the Time of COVID-19

By Kelly M. Walsh

The closure of businesses has had a tremendous impact on individual finances. Individuals and businesses that were previously hanging on month to month and making ends meet are likely finding themselves falling deeper and deeper into debt right now. Without any certainty as to when Pennsylvanians will be able to return to business as usual, many may be considering bankruptcy, and rightly so.

The purpose of bankruptcy is to give a fresh start to individuals and businesses who become overwhelmed by debt, particularly due to unforeseen circumstances that are beyond their control. The financial impact many are feeling as a result of COVID-19 certainly fits the bill. Congress foresaw that there would likely be widespread need for bankruptcy in the wake of COVID-19 and provided provisions in the CARES Act to make it easier for debtors to reorganize under bankruptcy and get back in control of their finances. If you are struggling directly or indirectly as a result of the COVID-19 virus, you should absolutely consider bankruptcy, and talk to an attorney about how best to proceed.

Of further concern is what happens to those who were already in the middle of a bankruptcy case when their livelihood was impacted by COVID-19. If you are currently making payments under a Chapter 13 bankruptcy plan, and you have been impacted directly or indirectly by COVID-19, you should contact your attorney right away. There are options available to give you some relief, including temporarily suspending your obligation to make Chapter 13 plan payments, converting your case to a Chapter 7, and under limited circumstances seeking an early discharge under hardship provisions.

Call Scaringi Law at 717-657-7770 right away to ask about a consultation if your finances have been affected directly or indirectly by the COVID-19 virus. We can examine your specific situation and let you know what relief is available to you.