It appears that increased stimulus payments will soon become a reality. Qualifying Americans are already set to receive $600.00 per person. While nothing is certain, and negotiations are ongoing, up to another $1,400.00 per person may be authorized.
Individuals preparing to file bankruptcy learn that they must disclose all of their property and all of their income. This is a fundamental requirement in bankruptcy. So, the question that is being raised by many of my clients is… do I get to keep my stimulus payments?
Yes!
Stimulus payments do not count towards you “means test” income that determines whether you will qualify for Chapter 7 bankruptcy. Also, the money you receive can be exempted from your creditors. So, you are not going to lose it, and it is not going to prevent you from filing.
It should be noted, however, that you must be careful about what you do with this money once you receive it. Using it to make a preferential payment to friends or family members could be problematic. It would also be best not to use it towards a frivolous purchase which may not be exemptable.
Paying attorney fees, or getting caught up on a car or mortgage payment, is completely acceptable.
If in doubt as to what you can (and can’t ) do with your stimulus check(s), call your bankruptcy attorney, or give us a call.
Your stimulus payments, like bankruptcy, are meant to help you. Use them both to your advantage during these difficult times.