In 2020, New York State passed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (“moratorium”). With some exceptions, it suspends eviction and foreclosure proceedings for nonpayment of rent or mortgage against tenants or property owners facing financial hardship. Courts have generally held that state laws imposing eviction moratoriums during the COVID-19 pandemic are constitutional exercises of the state’s police powers. For example, in Elmsford Apartments Associates LLC v. Cuomo, the district court for the Southern District of New York held that the moratorium did not violate the Contract Clause because that clause is subordinate to the power to protect the general welfare of its citizens though the exercise of its police power. In considering the constitutionality of a similar statute, a Texas district court in Terkel v. CDKC not only upheld the statute as a valid exercise of the state’s police powers, but acknowledged that it was a practice with a long history.

The newly signed law extends the CARES Act by amending the language in the two sunset provisions of the CARES Act, allowing the bankruptcy-related modifications to be in effect for two years instead of one. As a result, financially distressed small businesses and individuals will be able to enjoy greater access to bankruptcy relief until March 27, 2022. This article provides a summary of the extended provisions.

Statutory Context
Section 553 states: "Except as otherwise provided in this section and in sections 362 and 363 of this title, this title does not affect any right of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case under this title against a claim of such creditor against the debtor that arose before the commencement of the case[.]"