With just hours to spare after a change by the Senate, President Joe Biden signed a law Saturday that gives a one-year extension for certain personal and small business bankruptcy relief provisions that were part of a pandemic aid package last year.
The COVID-19 Bankruptcy Relief Extension Act extends until March 27, 2022, some elements of the Coronavirus Aid, Relief and Economic Security Act that allowed more individuals and small businesses to seek bankruptcy protections as the pandemic hit families and commerce. The new law maintains a higher maximum debt limit for Small Business Reorganization Act proceedings and continues to shield stimulus payments from creditors.
Justin M. Mertz, a bankruptcy partner with Michael Best & Friedrich LLP in Milwaukee, said businesses would have some continuity.
"Nothing is changing today," he said. "The vast majority of the benefits given to small-business debtors are extended to 2022."
Mertz said other extended CARES Act provisions drop confirmation requirements including the absolute priority rule and the requirement for an impaired accepting class.