The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed by President Trump on March 27, 2020, temporarily amends specific definitions in Chapter 7 and Chapter 13 filings. These amendments exclude payments as part of a debtor’s income that are COVID-19-related stimulus payments sent by the federal government.
For example, the amendments exclude these payments from “current monthly income” for purposes of determining a debtor’s eligibility for Chapter 7 or Chapter 13 bankruptcy. They are also excluded from the calculation of “disposable income” for purposes of Chapter 13 plan confirmation. Lastly, if “the debtor is experiencing or has experienced a material financial hardship due, directly or indirectly, to the coronavirus disease 2019 (COVID-19) pandemic,” Chapter 13 debtors are able to seek modifications of their confirmed Chapter 13 plans.