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Articles Tagged with New Jersey Coronavirus attorneys

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As a result of the Coronavirus (“COVID-19”) pandemic, the federal government has passed several pieces of legislation in an attempt to provide relief to struggling businesses.  One of these Acts is the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”).  However, since this legislation was signed empty-officeinto law, the CARES Act has been subject to various interpretations, pitfalls, and continuously-evolving government guidance.

The CARES Act created and allocated approximately $350 billion to the Paycheck Protection Program (“PPP).  However, those funds were almost immediately depleted by millions of businesses seeking assistance and the government thereafter allocated an additional $175 billion to the PPP.

The PPP provides loans to struggling businesses in the amount of two and a half times the small business’s average monthly payroll costs.  Thus, if the average monthly payroll is $50,000, the business might be eligible for up to $125,000 in PPP loans.  While the PPP is considered a loan program, the funds may be largely (or entirely) forgiven as long as the business uses the funds for approved expenses which are appropriately documented. However, like most aspects of the CARES Act and the PPP, there has been a great deal of uncertainty surrounding the specific requirements for loan forgiveness.  The SBA (the United States Small Business Administration) alone has posted supplemental rules and guidance on the matter more than ten times in two months.  Thus, as a result, the Paycheck Protection Program Flexibility Act was passed on June 5, 2020 amending the CARES Act. This new law has important ramifications for New Jersey small businesses.

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national-gallery-of-art-1380105-m-300x248Since the COV-19 outbreak began, more than 22 million Americans have filed for unemployment.  The increase in unemployment filings have been the result of businesses of all sizes being forced to shut down entirely or significantly limit their operations.  As a result, many people, both employers and employees, are seeing less income or no income at all while still being expected to pay their monthly payments such as rent, mortgage, car loan, credit card bills, and insurance.  These financial obligations are especially devastating for people and businesses that were already having trouble making those monthly payments prior to the COV-19 outbreak.

If a person and/or business is experiencing financial trouble, has significant debt, and/or is subject to collection actions such as a foreclosure or a collections lawsuit, bankruptcy may be a potential remedy.  One of the major benefits of filing for bankruptcy is the immediate automatic stay of collection actions and lawsuits.

The type of bankruptcy that may be appropriate for an individual and/or business depends on several factors.  For more information on the different types of bankruptcies, check out our posts on Chapter 7, Chapter 11, and Chapter 13 bankruptcies.

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