COVID-19 Bankruptcy Relief Extension Act of 2021
On March 27, 2021, President Biden signed into law the COVID-19 Bankruptcy Relief Extension Act of 2021 H.R. 1651, temporarily extending certain bankruptcy relief provisions that were enacted as part of last year's CARES Act through March 27, 2022.
Some of the key provisions of the extended Act are the following:
- Increased eligibility for the Small Business Reorganization Act (SBRA) for businesses filing under Subchapter V of Chapter 11; through March 27, 2022, businesses with debt up to $7,500,000.00 are eligible to file a Chapter 11 Subchapter V case.
- Amending the definition of "income" in the Bankruptcy Code for Chapter 7 and Chapter 13 debtors to exclude Coronavirus-related payments 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 plan payment modifications if they are experiencing a material financial hardship due to the Coronavirus pandemic, including extending their payments for up to seven (7) years after the initial plan payment was due.