The CARES Act, The COMOD and Chapter 13 Plan Infeasibility

With the enactment of the CARES Act, Chapter 13 Debtors can now get temporary relief from making their plan payments to the Chapter 13 Trustee through a stipulation called a COMOD Stipulation. The COMOD Stipulation allows Debtors to suspend up to 3 plan payments and/or extend the 60-month plan by 3 months, if necessary. For any extension beyond 3 months, a Motion to Modify/Suspend Plan Payments is required. Before the COMOD Stipulation can be entered into under the CARES Act, Debtors have to show causation related to the reduction of income caused by COVID-19. CARES is an acronym for The Coronavirus Aid, Relief and Economic Security Act.

If the plan has not been confirmed yet, the Debtors are not eligible for the CARES Act plan extension. For chapter 13 Debtors who fall within this category and are dealing with plan infeasibility issues due to a loss of income because of COVID-19, the plan can be amended to reduce the plan payments for a reasonably projected period of time and then provide for a step up in month 60 to cure any remaining infeasibility.

Sofya and I are entering into COMOD Stipulations with Chapter 13 Trustees, Filing Motions to Modify/Suspend Plan Payments and filing Motions to reduce plan payments to protect our Chapter 13 clients.

To succeed in a Chapter 13, it is essential that you have qualified, intelligent, experienced legal representation. We provide this to all of our clients.