COVID–19 Bankruptcy Relief Extension Act of 2021

COVID-19 Bankruptcy Relief Extension Act of 2021

This bill extends existing provisions that provide relief to debtors in bankruptcy, including those related to the COVID-19 (i.e., coronavirus disease 2019) pandemic.

These provisions (1) exclude certain COVID-19 aid payments from income for the purposes of bankruptcy, and (2) increase the debt eligibility threshold for businesses qualifying for certain types of Chapter 11 reorganization bankruptcy. Currently, these provisions expire March 27, 2021. The bill extends these provisions for one year.

The bill also allows for modification of a Chapter 13 repayment plan for plans confirmed before the date of enactment of this bill if the debtor is experiencing material financial hardship due to COVID-19. Currently, such a modification is only available for plans confirmed before March 27, 2020.

In addition, the bill extends through March 27, 2022, other bankruptcy protections that currently expire December 27, 2021. These provisions include those that (1) provide for discharge of certain debts, (2) prohibit denying a party COVID-related mortgage or eviction relief due to a party being a debtor in bankruptcy, and (3) protect against termination of utility services in certain circumstances.