Michigan’s shutdown in response to the Coronavirus pandemic has many Michiganders scrambling for ways to pay their bills and avoid going even further into debt. For some, this will be simply impossible. If your family is having to take out loans or use credit cards to get through this crisis and the bills are getting overwhelming, you may be wondering whether you can still file for bankruptcy during the COVID-19 stay at home order.
At 12:01 a.m., Tuesday, March 24, 2020, most of Michigan’s businesses shut down. Governor Gretchen Whitmer issued an executive order the day before in response to the spread of the novel Coronavirus COVID-19. State officials confirmed the first 2 cases of COVID-19 in the state on March 10, 2020. Restaurants, bars, and many other public places closed on March 16 after the state had seen more than 50 cases. By the time Governor Whitmer’s stay-at-home order went into effect, there had been over 1,300 cases and 15 deaths statewide.
Closing their doors or restricting services to only the essentials meant that many Michigan businesses needed to suspend operations, reduce hours, and temporarily lay off workers. Even Ford, General Motors, and Fiat-Chrysler are closing down their plants. While there is emergency help available for some through expanded unemployment insurance, many are resorting to spending down their savings, or borrowing the money needed to pay bills and buy essentials during these difficult times.
The Governor’s shut-down order spurred similar orders from the Michigan State Court Administrator’s Office – the office in charge of all state courts – limiting staff, restricting services, and postponing most hearings until the crisis has passed. But the Bankruptcy Court is federal, not state-based, and the federal government has not taken such extreme measures to slow the spread of COVID-19. As of the writing of this post, the U.S. Bankruptcy Courts, including the divisions in Detroit, Grand Rapids, and Flint were open for people to file their new bankruptcy petitions, and to continue cases that are currently pending.
However, the bankruptcy courts have changed the way they do some things to keep petitioners, lawyers, staff, and bankruptcy judges safe during the pandemic. First, the court is now accepting alternate signatures. That means you no longer have to physically sign your paperwork and hand it to your bankruptcy lawyer. Instead, your documents will simply contain your typed name. This does not relieve you of the duty to read everything prepared for you by your bankruptcy attorney and make sure it is correct. However, it does make it easier for your lawyer to electronically file documents on your behalf.
Once your petition for bankruptcy has been filed it will be scheduled for a 341 or first meeting. Traditionally, this was an in-person meeting between you, your bankruptcy lawyer, and the trustee assigned to your case. Under a Chapter 13 bankruptcy, you may also have been required to physically attend review hearings over the course of your payment plan. Now, most of these meetings and bankruptcy hearings are being done remotely over the phone. This means you can stay safe at home and your bankruptcy will still proceed as planned.
However, if you are one of the thousands of Michiganders whose income has been affected by the COVID-19 stay at home order, continuing your Chapter 13 payment plan may not be a realistic option. Even worse, if you are unfortunate enough to be one of the thousands who have become sick, you may find yourself quarantined, unable to work at all.
These circumstances may allow you to request a modification or hardship discharge of your existing Chapter 13 payment plan. Because the circumstances surrounding the Coronavirus are beyond your control, you may be able to ask the court to adjust your payments or even discharge the remaining det.
Michigan is feeling the need for financial relief now more than ever in recent years. At John A. Steinberger & Associates, P.C., we are a full-service bankruptcy law firm in Southeast MI. We help debtors and families in Southfield, throughout Metro Detroit, and in the surrounding communities. We are committed to helping new and existing clients get through the COVID-19 shutdown with their bankruptcy plans intact.
We are conducting business virtually, helping clients scan and email or fax documents to our staff who are working remotely, and electronically filing all the necessary paperwork on clients’ behalf. We will attend phone hearings with you and advocate for you with the trustee. If you are considering your options in these desperate times, we will happily speak with you in a phone consultation, evaluating your situation, and helping you make the right choice. If you think the Coronavirus may send you into bankruptcy, call us toll-free at (866) 690-2140 or contact us online to schedule a free initial phone consultation.