Your Bankruptcy Case And COVID-19 Virus

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Your Bankruptcy Case And COVID-19 Virus

Bankruptcy Law

To prevent health risks arising from the spread of the coronavirus and to contain the spread of the infection, some public health guidance related to COVID-19 was issued by the Government of the United Statesof America. These guidelines have resulted in the restriction of operations of nearly every business and official activities across diverse sectors. The working of the state and federal courts have also been affected in many ways by the current situation.  The courts in every state are making modifications in the way they operate with the focus more on operating remotely as much as possible. Bankruptcy is one area of law that has been severely affected. The following FAQs have been put together to help our clients understand the changes in bankruptcy rules and navigate through them more easily.


You are requested to monitor the website of the court in your respective state for information on opening and closures. The bankruptcy court website in your state will provide the most recent and updated information regarding the operation of the U.S.Trustee’s Office and United States Bankruptcy Court.


1. Should I file for bankruptcy?

If your debts are rapidly increasing than your current available income and severely affecting your ability to pay off your creditors, pushing you into a situation from where recovery looks almost impossible, then filing for bankruptcy is the only way to gain control of the rapidly deteriorating financial situation. Most individuals and businesses file for bankruptcy either because of gross financial mismanagement because they become victims of circumstances forced by some sudden and unforeseen development in their professional or personal lives.

2. Can I still fileif there is a Stay at home order in my state?

The shutdown order imposed across many states in the USA mandates limiting staff, restricting services, and postponing most hearings until the situation improves. However, as of now, the U.S. Bankruptcy Courts are open for people to file their new bankruptcy petitions, and to continue cases that are currently pending. The prevalent situation has resulted in a change in working conditions and processes. This is necessary to keep petitioners, lawyers, staff, and the judges protected from the virus.

The biggest change is that the courts are now accepting alternate signatures, which means you need not be present physically to sign the relevant documents and hand it to the bankruptcy lawyer. Your bankruptcy lawyer can file documents on your behalf electronically. Of course, it is assumed that you have read and understood everything mentioned in the documents. Also, most of the bankruptcy hearings are meetings are now being done remotely over the phone to make sure you stay safe at home and protected from the pandemic while your bankruptcy process will proceed as planned.

3. What if the court is closed?

Bankruptcy courts across the country are acknowledging the fact that it may not be possible for those filing for bankruptcy or have already filed to physically appear in court or attend related activities. It may increase the risk of getting infected by the coronavirus. It is very likely that the bankruptcy court in your state is open for business with the changed procedures and restrictions in place. Please check the bankruptcy court website in your state for the latest information and updates.

4. What fees do I have to pay?

While planning to file for bankruptcy, make sure that you plan for the finances as well because there are fees involved. In some cases, the court filing fee is waived. If you are not eligible for the waiver, you will have to pay the court filing fee for your specified case.

5. Can I make an appointment to see my lawyer during the COVID-19 OUTBREAK?

Yes, if it is necessary for you to get urgent legal recourse for your financially distressing situation during the pandemic, you can contact a bankruptcy lawyer. However, the meeting can only be through the phone or some virtual medium of communication due to the social distancing rules imposed by the government. All courts have made changes to its operations and processes to comply with the regulatory guidelines and to reduce the risk of the spread of Coronavirus. Please check with your local court by visiting the website or by phone to check if they allow personal or virtual appointments.

6. Will my case be handled differently during this time?

While the rules of filing for bankruptcy and the subsequent procedures will remain unchanged, the approach and the processes will definitely be different on account of the changed situation and circumstances. Filing of papers and documents is allowed remotely sparing you the hassle and risk of going out during these tough and trying times. Apart from that, there will be little changes in the manner in which the bankruptcy cases are handled.

7. I just filed, will my 341 meeting be scheduled? Do I have to go?

The date of your 341 meeting will be informed through Form 309A which is usually mailed a few days after filing for bankruptcy. The latest information shows that 341 meetings are not cancelled and continues to be scheduled 20 to 40 days from filing the case with the court. Some delays can be expected because of the current situation when everything is moving slow.

It is reliably learned that most jurisdictions ARE DOING 341 meetings telephonically AND VIA ZOOM at present. You can expect to receive specific instructions in this regard if at all the trustee agrees to a telephonic meeting or ZOOM MEETINGS.

8. Do I still have to abide by the deadlines in my case?

It is implicit that deadlines must be respected and you must have plans in place to meet all your deadlines associated with the case despite the prevailing circumstances. While there is no clear sign if sticking to deadlines will make the court look at your case with some leniency, missing a deadline such as payment dues, submission of course 2 certificate, or any other requested documents can result in a heightened risk of your case getting dismissed.

9. When should I expect my discharge?

A delay may be expected if your 341 meeting has been rescheduled for a later date. There have been instances of some courts rescheduling 341 meetings because of the pandemic.  If this has happened in your case, your discharge will NOT BE AFFECTED THE DATE WILL ONLY BE EXTENDED. Make sure you monitor your case and check for updates ON THE DEADLINES FOR YOUR DISCHARGE. If your 341 meeting has already taken place as scheduled, there WILL be NO delay in  RECEIVING YOUR discharge.

10. What should I do with the affidavit from the Chapter 7 Trustee regarding telephonic hearing?

The trustee is duty-bound to check and confirm your identity especially when the 341 meeting is scheduled to take place remotely via video conferencing or telephonically. The affidavit is hence needed to verify your identity and ensure there will be no problems later on.

11. Do I still get an automatic stay if I file my bankruptcy case now?

Yes, an automatic stay might not get affected unless your bankruptcy case has been dismissed. Also, the automatic stay will continue unless there are some exceptional situations such as asking for some relief from stay.

12. How will my creditors know that I filed for bankruptcy?

The bankruptcy court provides notice to your creditors as stated by the state’s bankruptcy laws. They will stay informed of all future developments as well.

We believe that the above information will help those who have filed for bankruptcy or are in the middle of the process understand what they need to do to mitigate the risks of not following the law, even if it is done unintentionally.  While we have tried our best to make the information as comprehensive and accurate as possible, you are requested to check the website of the court relevant to your case for the most recent updates about the amendment of the rules specific to COVID-19 pandemic.