Kentucky Bankruptcy Law

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The Impact of the CARES Act on Chapter 13 Cases

A great breakdown of some of the debt related provisions of the CARES act.

Chapter 13 Trustee, EDKY: Trustee's Blog

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on Friday, March 27, 2020 and includes provisions that may have an effect on debtors and creditors in chapter 13 cases.

Bankruptcy-Specific Provisions:

Payments the federal government will make to individuals under the CARES Act (the well-publicized $1,200/$2,400+ direct payments) are not counted as income for bankruptcy purposes.  Debtors in chapter 13 cases can keep the money.

Section 1329 of the Bankruptcy Code relating to modification of plans after confirmation has been amended to add a new subsection (d).  I have decided to skip the soundbite and set forth the actual statutory language as follows:

(d)(1) Subject to paragraph (3), for a plan confirmed prior to the date of enactment of this subsection, the plan may be modified upon the request of the debtor if-

(A) the debtor is experiencing or has experienced a material financial…

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March 31, 2020 Posted by | Uncategorized | Leave a comment

“I Can’t Make My Plan Payments Right Now”: These Policy and Procedure Changes Might Help

Tremendous news that can help people complete their chapter 13 bankruptcy in this trying time.

Chapter 13 Trustee, EDKY: Trustee's Blog

Due to the present health and economic crises, we are making changes to the procedures and policies regarding motions to dismiss for nonpayment and probation orders in the EDKY.  These changes will remain effective until further notice.

I will not file motions to dismiss until debtors are at least four (4) months’ delinquent.  The present practice is to file motions to dismiss when the delinquency is at least two (2) months.

After I file a motion to dismiss, debtors can agree to become current within 30, 60, 90, 120, or 150 days.  The new agreed probation orders allowing 120 days or 150 days to become current will be posted on my website by Monday, March 23.

Paragraph (3) of Local Form 3070-1(b), the Probation Order Regarding Chapter 13 Plan Payments, and our agreed probation orders, will be changed to add “Unless the Court orders otherwise . . . .”  This…

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March 20, 2020 Posted by | Uncategorized | Leave a comment