How the COVID-19 Pandemic Affects Your Pending Bankruptcy Proceeding
- posted: May 04, 2020
Every part of the country has been affected by the coronavirus. Like restaurants, arenas and other locations where people assemble for business or pleasure, most courts have been closed. If you are in the midst of a bankruptcy proceeding, your case might be delayed, handled telephonically or be otherwise disrupted due to the pandemic. Furthermore, as bankruptcy courts attempt to improvise solutions for debtors and creditors, the country’s economic upheaval indicates that the system might soon become overwhelmed.
Regardless of what you hear on the news or from friends, don’t assume either that your case is definitely delayed or that it will remain unaffected, as courts typically make these decisions based on local conditions. However, you should be aware that potential impacts to your bankruptcy proceedings might include:
Court closures — Many federal courthouses have been off limits for understandable reasons. In Detroit, a court was closed after a security officer tested positive for COVID-19, an example of local conditions preceding top-down decisions to close. You can check with your lawyer, call the court or see updates on closures in your state here.
Telephonic creditors’ meetings — As the pandemic was spreading across the country, the U.S. Trustee ordered that Section 341 Creditors’ Meetings no longer be held in person. Depending on the specific COVID-19 restrictions in your area, Section 341 meetings might still be happening virtually. If you just filed recently, your notice should arrive in the mail shortly with a meeting date and possibly instructions for holding the meeting online or by phone.
Payment and filing deadlines — Dates for filings and payments have not changed, and you should assume that the court will still require that all deadlines be met unless you have received a written notice informing you otherwise.
In-person signatures — Normally, bankruptcy petitions require a “wet signature” — meaning pen-to-paper, in-person signatures. Depending on where you live and current social distancing restrictions, these requirements might be waived.
Changes in the court system due to COVID-19 may differ from one locality to the next. Consult an experienced bankruptcy attorney to help you navigate constantly evolving processes and changing norms, so that you can emerge from bankruptcy as quickly and successfully as possible.
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