Posted On May 14, 2021
What to Know About Extending Your Chapter 13 Bankruptcy

What to Know About Extending Your Chapter 13 Bankruptcy

The Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress on March 27, 2020, allows people who have faced financial hardships caused by the COVID-19 pandemic to extend their active Chapter 13 bankruptcy cases to as many as seven years. The provisions of the act were to be applicable for a year but were extended for an additional year.


Under the act, people involved in Chapter 13 bankruptcies that were filed and confirmed before the act’s enactment date could file modifications of their Chapter 13 plans to extend their duration from the usual maximum period of five years to seven years. Debtors can modify their plans if they are experiencing or have experienced job loss, loss of revenue, or inability to maintain their planned payments because of the pandemic.

The CARES Act was designed to be applicable for just one year. That was under the presumption the COVID-19 pandemic would have ended by one year after March 2020. Because that did not happen, Congress unanimously extended the act’s provisions related to Chapter 13 bankruptcy by another year upon the expiration of the original provisions. As a result, they will remain applicable through March 27, 2022. The new legislation is titled the COVID-19 Bankruptcy Relief Extension Act of 2021.

How to Extend Chapter 13 Bankruptcy

Under the provisions of the original CARES Act, a person with a Chapter 13 bankruptcy case that was confirmed before the date of the act’s enactment can talk to a bankruptcy lawyer to file a motion to modify his or her plan with the Bankruptcy court. He or she will need to demonstrate the pandemic’s direct or indirect effect on his or her finances.

Extending a Chapter 13 payment plan is beneficial to a person struggling to pay his or her monthly expenses. The additional 24 months allow the individual to reduce his or her monthly payment amount or catch up on missed payments. 

For example, a person paying $500 every month in a 5-year payment plan could have the payment reduced to approximately $357 per month if he or she stretches the plan out to a 7-year term.

Therefore, it is important for people whose Chapter 13 bankruptcy plan in Nevada was suitable for their employment or income status before the pandemic but does not fit their current circumstances to discuss their situation with bankruptcy lawyers from Las Vegas.