The CARES Act: What You Need to Know

As you have probably heard, our representatives on Capitol Hill recently came together and passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. There are some interesting repercussions directly related to bankruptcy law that we want our readers and clients to be aware of.

First off, here’s the one that everyone’s talking about: the direct deposits. All Americans who pay taxes will receive a one-time direct deposit of up to $1,200. Married couples will receive $2,400, plus an additional $500 per child. While the exact payments will vary, Washington Post has set up a handy tool for determining your eligibility.

Another big perk of this bill is that all testing (as well as potential vaccines) for COVID-19 will be covered at no cost to patients. This is very good for two reasons: it means that people who are sick won’t have to pay out of pocket and that, with this in mind, more people are likely to get tested. Hopefully, this will help flatten the curve and put the U.S. on the path to recovery.

The CARES Act and Bankruptcy

But there’s more to this sweeping, trillion-dollar bill than the headlines on the evening news. This piece of legislation has major ramifications for people who have already filed bankruptcy.

For example, the bills allows modification of a chapter 13 plan duration to 7 years for debtors who have been affected by COVID-19. Note that this only applies to cases that have already been filed and confirmed and that this new rule will sunset in one year, reverting to its previous language.

The Act will also have a big impact on unemployment benefits. Until July 31, 2020, all regular Unemployment and Pandemic Unemployment Assistance claimants will receive their usual benefit plus an additional $600 per week. Business Insider has a handy step-by-step guide on applying for Unemployment Benefits. There’s no separate application for the extra $600.

In addition, student loan payments will be put on automatic suspension. However, this only applies to student loans held by the federal government. These payments are suspended until Sept. 30, 2020. While loan payments are suspended, interest will not accrue.

And if you own a small business, you may qualify for an Economic Injury Disaster Loan advance of up to $10,000. This program is aimed at small businesses with fewer than 500 employees; to qualify, your business must be affected in some way, shape, or form by COVID-19. To apply for this aid, follow this link to the SBA’s official website.

Like I said at the beginning of this post: this bill is huge, and there are tons of great articles doing deep dives into the ins and out of the legislation.

But, big as this bill is, you can only cover so many bases in one go. Utilities are still due, after all, and it will depend largely on states and local municipalities to fill in the inevitable gaps that arise. For more information as it develops, stay tuned to this blog and get regular information on all COVID-19 related aid and legislation.

Share This Page

Bond & Botes Law Offices

At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call 1-877-581-3396 or click here to setup your free phone or video consultation.

The lawyers at the Bond & Botes affiliated offices serve clients at offices in Anniston, Birmingham, Mobile, Montgomery, Opelika, Decatur, Huntsville, Florence, Haleyville and Gadsden, Alabama; Vicksburg, Hattiesburg and Jackson, Mississippi. Read our disclaimer here. You can view our Privacy Policy here.

Alabama Offices

Birmingham

2107 5th Avenue North
Age-Herald Building
Birmingham, Alabama 35203
Phone: (205) 802-2200


Shelby County Location
15 Southlake Lane, Ste 140
Birmingham, AL 35244
Phone: (205) 802-2200


Florence Location
121 S. Court Street
Florence, AL 35630
Phone: (256) 760-1010


Huntsville Location
225 Pratt Avenue NE
Huntsville, AL 35801
Phone: (256) 539-9899


Montgomery Location
311 Catoma Street
Montgomery, AL 36104
Phone: (334) 264-3363


Decatur Location
605 Bank Street
Decatur, AL 35601
Phone: (256) 355-2447


Haleyville Location
914 19th St.
Haleyville, AL 35565
Phone: (205) 486-3580


Gadsden Location
430-B Chestnut Street
Gadsden, AL 35901
Phone: (256) 485-0195


Opelika Location
216 South 8th Street
Opelika 36801
Phone: (334) 887-7666


Anniston Location
1302 Noble St #2C
Anniston, AL 36201
Phone: (256) 344-3559


Cullman Location
200 Second Avenue SW
Cullman, AL 35055
Phone: (256) 739-9866


Mississippi Offices

Jackson Location
5760 I-55 North, Ste 100
Jackson, MS 39211
Phone: (601) 353-5000


Hattiesburg Location
607 Corinne St, Ste B8
Hattiesburg, MS 39401
Phone: (601) 264-7200


Vicksburg Location
1212 Farmer Street
Vicksburg, MS 39180
Phone: (601) 353-5000

© 2024 by Bond & Botes Law Offices. All rights reserved. Disclaimer | Privacy Policy