Can I still file bankruptcy during COVID-19? What is different about bankruptcy during this National Emergency?

For now, the Minnesota bankruptcy court is still accepting new consumer and business bankruptcy filings for all chapters of bankruptcy, continuing the availability for critical bankruptcy relief for persons otherwise in the process of foreclosure, wage garnishment, debt collection and other unknowns. The court systems are essential functions of our country, core to constitutional functions and access to justice. For this reason, it’s unlikely that bankruptcy filings will be suspended or cut off during the national emergency. However given that attorneys are also dealing with the same additional pressures of taking care of their own families and after working with more limited resources than normal, you may expect longer response times.

Yes, you can still file chapter 7 and chapter 13 bankruptcy during the COVID-19 outbreak, but the process will be different.

If you have not yet consulted and retained a bankruptcy attorney, the first hurdle you face may be consulting and establishing the necessary information for your attorney to file your bankruptcy case. If you have a computer or device with camera function, most attorneys are switching to video or telephone conferences instead of in-person consultations. Wartchow Law offices utilizes the application Zoom for video conferencing and document review, and Zoom does not require that clients create an account or login, although a download of the software may be needed. Next you will need to provide your attorney with a significant amount of information and documentation, posing another potential problem for those that do not have access to a scanner or fax machine from home.

Signatures also pose an issue for which the Minnesota bankruptcy court has already addressed by temporarily suspending the requirement for original “wet” signatures on bankruptcy documents, and instead allowing attorneys to collect their clients’ authorized e-signatures. This allows debtors to sign and file their bankruptcy documents while reducing the need for physical contact between attorneys and clients.

Also for now, the Minnesota bankruptcy court and panel trustees have suspended in-person court hearings for lift stay motions, chapter 13 plan confirmations, and Meetings of Creditors—all of which typically take place in person at the courthouse or other designated official location. While the process is still in flux for how to hold these required appearances without compromising public health, it is expected that judges and trustees will soon hold Meetings of Creditors and other required hearings telephonically and/or by video conference. For pending bankruptcy cases that have already been filed, this means that Meetings of Creditors that have not yet been held are currently being suspended and indefinitely continued, for now at least. However the suspension and continuance of hearings does not mean that the protection of the automatic stay or other bankruptcy relief is not available. Creditors may also still file motions for lift stay and adversary proceedings, and bankruptcy trustees are still working to administer bankruptcy estates during this national emergency.

In sum, you can still file bankruptcy and the need to file may be greater than ever. Potential debtors are encouraged to check with their state authorities to see if other forms of non-bankruptcy relief may be available to them, including lessening of restrictions and wait periods on unemployment benefits, availability of emergency funds, restrictions on eviction, foreclosure and other debt collection, as well as check with their creditors to see what forbearance options may be available to them regarding mortgage, auto loan and credit card payments.

Every bankruptcy court is separately administered and what one bankruptcy court or bankruptcy trustee is doing during COVID-19 may not be the case for all bankruptcy courts or trustees. It’s always best to check with a local bankruptcy attorney or bankruptcy court website for your district to see what the latest is as the courts, trustees, bankruptcy attorneys and other practitioners change the way that bankruptcy cases are administered.

Located in Edina, Lynn Wartchow represents all chapters of bankruptcy in Minneapolis, St. Paul, Ramsey and Hennepin County, and throughout Minnesota.

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