11 FAQs About How the Coronavirus Pandemic May Affect Your Bankruptcy

The COVID-19 pandemic left many Alabama families facing overwhelming financial stress. Lost income, mounting bills, and economic uncertainty pushed thousands to consider bankruptcy as a path to relief. At Nelson, Bryan, and Cross, we’ve fielded countless calls from individuals wondering how the crisis may impact their ability to file or proceed with bankruptcy.

Here are 11 frequently asked questions—and answers—to help guide you through this challenging season.

1. Can I still file for bankruptcy during the pandemic?

Yes. Bankruptcy courts continued operating throughout the COVID-19 crisis, though most hearings shifted to phone or video conference to keep everyone safe.

2. Have deadlines or rules changed because of COVID-19?

Some deadlines were extended or adjusted early in the pandemic, especially for documentation and court appearances. Check with your attorney for the most up-to-date rules in your district.

3. Can I file if I lost my job due to COVID-19?

Yes. Job loss is a qualifying financial hardship. In fact, many people used bankruptcy to stop creditor harassment and start fresh after pandemic-related unemployment.

4. Will stimulus payments affect my bankruptcy?

Under the CARES Act, most stimulus payments and certain unemployment benefits are excluded from income calculations for bankruptcy filings.

5. What about my current Chapter 13 repayment plan?

If you were already in a Chapter 13 plan and COVID-19 disrupted your income, you may be eligible to extend your repayment term for up to 7 years to lower your monthly payments.

6. Do I need to appear in court in person?

Not usually. During the height of the pandemic, most 341 meetings (also called creditors’ meetings) and hearings were conducted remotely. This reduced exposure and made the process more accessible.

7. Is bankruptcy the right choice if I fell behind on rent or my mortgage during COVID-19?

Possibly. Bankruptcy can help delay or stop foreclosure and eviction, depending on your specific situation. Chapter 13 may allow you to catch up on missed payments over time.

8. Will filing bankruptcy erase COVID-related medical bills?

Yes. Like most unsecured debts, medical bills—even those related to COVID-19 treatment—are typically dischargeable in Chapter 7 and manageable under Chapter 13.

9. Can I keep my car or home?

Most people can keep essential property when filing for bankruptcy. Alabama’s exemption laws allow for protection of modest assets, especially when you’re current or can reaffirm debts.

10. Should I wait until the pandemic ends to file?

No need to wait. In fact, the sooner you take action, the sooner you can regain financial control. Waiting may lead to wage garnishment, lawsuits, or utility shutoffs.

11. Do I need a lawyer to file bankruptcy right now?

Technically no—but it’s highly recommended. COVID-era changes made bankruptcy more complex, and working with an experienced bankruptcy attorney can help you avoid delays, errors, or denials.

Final Thoughts

Bankruptcy isn’t about failure—it’s about fresh starts. If the pandemic knocked you down, you’re not alone. The law offers real solutions, and the team at Nelson, Bryan, and Cross is here to help you rise again.

Contact us today for a free consultation. We’ll explain your options clearly and guide you toward lasting financial peace.