Coronavirus spread severely restricts access to Bankruptcy Courts in NYC

New directives from Courts about who may enter the Courthouse

Emails went out today from both the Southern District of New York and the for the Eastern District of New York, establishing guidelines for who would be allowed to enter to Court, as a result of the spreading Coronavirus. This is the first time in 14 years of practice that I’ve ever seen this, and I think this is just the beginning. The notice from the Southern District is attached, and it’s quite specific about who may enter and the procedures that both attorneys and clients need to follow if they believe they’re sick and/or visited any of the Countries mentioned in the Order. If you have a current case before the Court, I would urge you to read the below.

“I filed Chapter 7 Bankruptcy in NYC and I have a scheduled Meeting of the Creditors. What should I do?”

First and foremost, speak to your attorney and have your attorney reach out to the Court, as the situation is fluid and can/will change daily. What will likely happen, if this virus gets worse and spreads, is that your Meeting of the Creditors may be postponed. In that scenario, your Bankruptcy “stay” would stay in effect; you’d be status quo. Creditors cannot contact you or harass you to pay your debts-if they do, you may have a case to sue them. On the other hand, you would also not receive a discharge until you had your meeting of the Creditors and your case was closed. You’d essentially be in Bankruptcy limbo for a time. An interesting scenario could play out to the extent that you come into assets during this time (whether by inheriting money from the passing of a loved one or from a lawsuit). To be clear-at the time of this post, there is absolutely no confirmation that any meetings are postponed-the issue surrounds who may actually appear in Court.

“Can I do the Meeting of the Creditors over the phone?”

The Bankruptcy court for SDNY has already begun setting stringent requirements on who may appear for Chapter 13 caes.
Happening in real time

The above is an email I received earlier today that covers Chapter 13 cases, so there is no word yet on whether or not the Court will require in person appearances or allow Chapter 7 debtors to appear telephonicly. I think (based on nothing) that if the Court’s restrictions continue to be what they are, you may very well see Debtors that are appearing for the Meeting of the Creditors over the phone. How this would happen (as creditors have the right to appear at these hearings) is still unclear, but the Court would likely provide guidelines soon.

Again, more than anything else, if you’ve filed a Bankruptcy case in NYC, I’d urge you to immediately contact your Bankruptcy attorney and/or the Bankruptcy Court, for guidance on what you should do.