Last March, in response to the COVID-19 pandemic, Congress passed the CARES Act which made many debtor friendly changes to the Bankruptcy Code. The CARES Act extends the allowable length of confirmed Chapter 13 plans to seven years. Currently, plans cannot run more than 5 years.
LeRoy’s plan was confirmed prior to March 27, 2021, and he is experiencing a COVID-19-related hardship, so the CARES Act allows LeRoy to cure any arrears in his plan by modifying his plan up to 7 years.
LeRoy can include his delinquent mortgage payments and delinquent trustee payments in his amended plan; save his case from dismissal; and end up with lower monthly plan payment since the term of his plan has now been extended from 60 months to 84 months.
The CARES Act is lifeline for many debtors that have been negatively impacted by the coronavirus but don’t wait too long as the CARES Act is scheduled to Sunset on March 27, 2022.
You must file a Motion to Modify well before this deadline in order to reduce your monthly trustee payment and extend the term of your current plan from 60 months to 84 months.
The lower the plan payment, the higher the chapter 13 success rate so I suggest anyone that is impacted by the coronavirus should consider extending their plan to 84 months.