COVID-19: Consumer Related Issues

  • By:Hoosier Bankruptcy

The COVID -19 pandemic has caused many previously unforeseen changes to our daily lives and the laws and regulations which govern them. Here are a few notable issues which may impact our clients:


The CARE Act will exclude stimulus checks and other payments from being considered as income for MEANS testing or calculation of Chapter 13 plan payments.

The CARE Act will allow debtors in Chapter 13 cases to extend plans upon petition for up to seven (7) years from the date of first payment if they have suffered a material financial hardship, either directly or indirectly, due to the COVID-19 pandemic. (Normally plans have to be concluded within five (5) years of the first payment.)

341 Creditors Meetings through April 10, 2020 have been continued to a later date.


The “CARES Act” HR748 provides foreclosure relief for “federally backed loans”. This will include Fannie Mae or Freddie Mac loans. For a period of not less than 60 days which began on March 18, 2020 a servicer of a federally backed mortgage may not initiate foreclosure, move for a foreclosure judgment, order a sale, or execute a foreclosure related eviction or sale.

The “CARES Act” further allows borrowers under “federally backed loans” to request and obtain a forbearance from mortgage payments for up to 180 days and then to ask for an additional 180 days. During forbearance, not fees, penalties or interest shall accrue to the borrower’s account beyond the amounts scheduled or calculated as if all payments were made on time and in full under the note.

For a period of 120 days commencing on March 27, 2020 the Lessor of a “Covered Dwelling” may not file a court action for eviction or charge additional fees for non-payment of rent. For purposes of this act the term “Covered Dwelling” includes buildings which are secured by a federally backed mortgage or which participate in certain federal housing programs.

Indiana’s Governor has declared a Public Health Emergency through April 5, 2020. During this time, no residential eviction proceedings or foreclosures (regardless if federally backed or not) may be initiated.


Direct Loans and FFEL Loans will have payments suspended through September 30, 2020. During this period the loans shall not accrue any interest. Further provisions are made for determining loan forgiveness and rehabilitation during this time. No negative credit reports will be issued during the period of suspension. Also, involuntary collections will be suspended; this means that wage garnishments, tax intercepts, offset of federal benefits and any other collection activity will cease.


Similar to the treatment of student loans, SSA benefit payments will not be offset to satisfy delinquent non-tax federal debts.


The ACT provides for a payment of $1200 to many Americans with an additional $500 for each child. Generally speaking these amounts will be protected from seizure by the US Government.


Indiana and many other states have instituted a moratorium on utility terminations.

While the Governor has declared that our practice is an essential business and may remain open during this declared emergency we have curtailed normal operations to protect our staff from both a physical and emotional perspective. That being said, we are still operating and will be most happy to discuss any concerns that you might have during this pandemic. Feel free to call our office at 765-287-1717 or email us at

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