Frequently Asked Questions About CARES Act

The Corona Aid Relief and Economic Security Act signed by President Trump on March 27, 2020 is a $2 trillion aid package that will provide financial aid for the US families and businesses impacted by the COVID-19 coronavirus pandemic. There funds have been allocated as follows:

• $290 billion in direct payments to eligible taxpayers
• $260 billion in expanded unemployment insurance
• $150 billion for state and local governments
• $510 billion in expanded lending for businesses and local governments
• $377 billion in new loans and grants for small businesses
• $127 billion for hospitals for ventilators and other equipment

How can you benefit?

The CARES Act has created numerous procedures to assist the public, from stimulus checks to qualifying adults to extending ceasing collections efforts and garnishments. If you would like to know how you can benefit from the CARES Act, XXX (please click on the lick below?)

Bankruptcy

For one year subsequent to the enactment of the CARES ACT, Title 11 of the United States Code has been amended to include the following terms:

• For future cases: Supplemental income received as a result of the COVID-19 pandemic (i.e. stimulus check, unemployment under the CARES Act, as in the case of other protected income like disability and child support, shall not be included towards your income calculation. This applies for both, Chapter 7 and Chapter 13, voluntary bankruptcy petitions. This is particularly important for Debtors that still have other sources of income, but their family income has been reduced due to loss of employment of one of more household members.

• For cases already filed: If you have filed for Chapter 13 and are currently under a repayment, your confirmed plan may be modified to be extended to a total of seven (7) years. A motion has to be filed by the Debtor identifying the direct or indirect hardship caused by the COVID-19 pandemic. Extending your plan will allow you to reduce your monthly payments

If you are suffering financial hardship due to COVID-19, please contact our office so we can do a free evaluation of your case and determine if a bankruptcy can provide you with the financial relief that you are looking for.

Foreclosures & Evictions

On March 18, 2020, President Trump announced the foreclosure and eviction moratorium in response to the COVID-19 outbreak. In general terms, federally-backed mortgages, which include loans owned by Fannie Mae and Freddie Mac and those guaranteed by the Department of Veterans Affairs, the Department of Agriculture and the Federal Housing Administration, are subject to a moratorium on the foreclosure process for a period for no less than 60 days starting on March 18th. This moratorium stops all related servicers from initiating any judicial or non-judicial foreclosure process, and from obtaining foreclosure judgments or foreclosure sales.

The CARES Act only applies to federal-backed mortgages, which include those purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. Private loans and other securitized mortgages are not covered under the Act. If you want to know if your mortgage is subject to the federal moratorium or if you are eligible to greater protections, visit the Freddie Mac and Fannie Mae links below:

Freddie Mac Loan Lookup: https://ww3.freddiemac.com/loanlookup/

Fannie Mae Loan Lookup: https://www.knowyouroptions.com/loanlookup

Locally, Florida Governor Ron DeSantis ordered on April 2^nd a moratorium of all foreclosures (commercial and residential) and residential evictions in the State of Florida for a minimum of 45 days. DeSantis’ Executive Order No. 20-94 suspends all actions for mortgage foreclosures around the state, including those covered by the nationwide moratorium established by FHA. Similarly, this Order halts residential evictions for non-payment of rent in the case that the renters have been harmed by the COVID-19 outbreak. However, it is important to note that the Florida Order does not remove the obligation to make mortgage and rent payments, and that the order applies solely to cases of nonpayment of rent and/or mortgage by those affected by the outbreak. Commercial evictions, and commercial and residential foreclosures for other reasons than nonpayment are not subject to the Order.

Loan Modifications and Forbearance Programs

Under Section 4022 of CARES Act, a borrower may request a forbearance, affirming that the borrower is experiencing a financial hardship during the COVID-19 emergency. This forbearance shall be granted for up to 180 days and may be extended for an additional period of up to 180 days at the borrower’s request. There are no fees, penalties, or interest beyond the amounts already included in your loan agreement, and your mortgage payments shall be scheduled or calculated as if all contractual payments were on time and in full.  If approved for a forbearance, you will not be subject to foreclosure proceedings for nonpayment.

Although only federal-backed mortgages are subject to the CARES Act, other mortgages and servicers may also extend different programs to assist borrowers during these difficult times, which may include loan modifications, forbearances, and waivers. Every servicer is different, but they should be able to guide you through the alternatives that may be available to you given your specific circumstances.

If you need assistance with a loan forbearance or loan modification, please contact our office for a free consultation.

Economic Impact Payment

By now, a great number of adults have already received the anticipated stimulus check. However, if you have not received yet and you want to know the status of your economic impact payment, please visit the following IRS website https://www.irs.gov/coronavirus/get-my-payment.

The stimulus payment depends on your income. Eligibility is as follows:

• Single adults with social security numbers who are United States residents and have adjusted gross income of $75,000 or less will get the full amount of $1,200.
• Married couples with no children earning $150,000 or less will receive a total of $2,400.
• Taxpayers filing as head of household will get the full payment if they have earned $112,500 or less.
• Additional $500 per child under 16 years of age.
• Eligible retirees, recipients of social security, railroad retirement, disability, or veteran’s benefits, as well as taxpayers who do not make enough money to normally have to file a tax return are eligible.

Please refer to your 2019 taxes, if filed, or your 2018 taxes for your adjusted gross income.

Who is not eligible:

• If your adjusted gross income is greater than

• • $99,000 if your filing status was single or married filing separately
  • $136,500 for head of household
  • $198,000 if your filing status was married filing jointly
• People claimed as a dependent on someone else’s return (i.e. child, student or older dependent who can be claimed on a parent’s return).
• You do not have a valid Social Security number.
• You are a nonresident alien.
• You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019.

No application is needed unless additional information is needed, or for people that did not file or are not required to file their 2018 or 2019 federal income tax return. The application may be found here: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here. Please remember that the IRS does NOT call to request any personal information. If you receive any calls from the IRS, beware as it may be a scam.

Nearly all collection efforts and garnishments for federal debt have been suspended. This includes the IRS and federal student loans. Therefore, if you’re eligible, you should receive your stimulus payment, unless it is garnished due to child support arrears.

Unemployment Benefits

The CARES Act has added and extended 3 different types of temporary supplemental benefits for unemployment.

1. Pandemic Unemployment Compensation: This compensation adds $600 per month to your calculated unemployment benefit insurance until July 31, 2020, or 4 months.

2. Pandemic Emergency Unemployment Compensation: This compensation adds 13 weeks to the all unemployment benefits (26 weeks), for a total of 39 weeks. Some terms apply:

• Applicants must be actively searching for work with flexibility, unless there is movement restriction, illness, quarantine, or other distressing circumstances. Flexibilities vary depending on the State.
• No waiting period to receive benefits
• States cannot decrease the maximum number of weeks of unemployment insurance or the weekly benefits as approved by January 1, 2020.

3. Pandemic Unemployment Assistance: This benefit is available to people that usually don’t qualify for unemployment assistance, and the eligibility extends to 39 weeks, expiring on December 31, 2020, unless it is otherwise extended. People that may qualify for this benefit are:

• Part-time employees
• Self-employed- independent contractors, freelancers, etc.
• People with insufficient employment history
• Applicants that have already exhausted their benefits.

4. Short-term Compensation: This benefit assists employers to avoid layoffs by changing employees to part-time and allowing those employees to collect part-time unemployment benefits.