Coronavirus, Mortgages, Credit Cards, Student Loans and Bankruptcy
Updated: a day ago
Updated as of April 3, 2020 - Note that this information is constantly changing and evolving and I will update this article as I can. This is intended to provide clients with some guidance to relief or information regarding their concerns:
Coronavirus - Pursuant to Executive Order 2020-21, Governor Whitmer has ordered that all residents in Michigan should "shelter in place". This means that most businesses will be closed and all non-essential workers should stay home. Essential workers are those that are necessary to sustain or protect life, such as healthcare workers. If you do not fall into this category, please stay home, wash your hands and stay safe. My office is still open to assist you via telephone and email.
Parenting Time and Child Support - Although family courts are closed, besides emergency services, the Michigan Supreme Court has indicated that it is expected that people will continue complying with any parenting time orders or support orders currently in place. Parents are encouraged to work together in the best interests of their children to minimize exposure and promote safety in the best interests of their children. Official guidelines are printed here.
Chapter 13 Plan Payments - At this time, while the Trustee offices are certainly sympathetic to any income loss occurring at this time, they do not have the power to "waive" Chapter 13 Plan payments. These plan payments may be covering mortgages and car payments and in order to pay these, your payments need to keep coming in as scheduled. If you have automatic payments scheduled to come out of a bank account, contact your attorney to stop a direct withdrawal if you do not have the funds available. Both Trustees are accepting payments via www.tfsbillpay.com, any payment is better than no payment, so try to keep as current as possible. If you are out of work and had a payroll order in place, please make payments online.
Stimulus Checks - As of 3/26/20, the government has announced that adults may receive checks up to $1200 depending on their household income starting in April or May 2020. The specifics of this have not yet been released or confirmed. As of right now, at least one Chapter 13 Trustee's office has indicated they will NOT be seeking this money for cases.
Unemployment in Michigan - The Governor has issued Executive Order 2020-10 to address the need of employees in the state that are losing income. From now until at least April 14, 2020, the following now constitute "leaving work involuntarily for medical reasons" and a "layoff" for unemployment benefits:
Self-isolation or quarantine due to elevated risk from COVID-19 due to being immuno-compromised, displaying symptoms, having contact in the last 14 days with someone with a confirmed diagnosis or the need to care for someone with COVID-19
Family care responsibility as a result of a government directive (this includes caring for children due to a school closing)
The time to file for unemployment has been extended to within 28 days of the last day worked
Additionally, self-employed individuals may be able to claim unemployment benefits under the CARES Act. Please follow up with the Unemployment website in Michigan for more information coming out on this potential benefit.
Tax Returns - The tax filing deadline has been moved from April 15 to July 15.
Mortgage Payments - I've received several inquiries from clients about making mortgage payments. Some mortgage companies are indicating that they may be willing to assist with mortgage payments. While there is no firm information on this, it will likely be on a mortgage company by company basis. At this time, a mortgage company cannot just "waive" a mortgage payment, so keep from falling behind in your payments if at all possible. Any relief will likely require an application process in the future.
Credit Cards - Many credit card companies are also indicating they may be willing to assist debtors with credit card payments, however, beware that if they waive payments it is likely interest will continue accruing, so if you can make these payments, you should.
Student Loans - The stimulus package is anticipated to provide student loan borrowers a reprieve from payments until October and any interest that would have accrued during that period would be waived. I am concerned about student loan servicing companies' ability to enact this change swiftly or correctly.
Court Closures - As of right now, many courts are closed until mid-April. Some hearings are happening over the phone. Contact your attorney if you have an upcoming hearing.
Attorney Allison Greenlee Korr handles cases in Kalamazoo, Battle Creek and all surrounding counties, call today for a consultation. 269-381-4471
Note that none of the above is intended as legal, medical or tax advice and is informational only.