Can I use my stimulus checks to file for bankruptcy?
What happens to my stimulus check after I file for bankruptcy?
Your stimulus payment is just one of the many factors we consider when helping you decide if bankruptcy is right for you. Our bankruptcy attorneys are here to help you regain financial control and are happy to answer any questions that you may have, especially during the pandemic.
Chapter 7 Bankruptcy
When it comes to the stimulus checks, the CARES Act specifically excludes these funds from current monthly income, which means that the income from your stimulus check is not to be considered monthly income. It is important that you speak to one of our dedicated bankruptcy attorneys on how to help use your stimulus payment to get a fresh financial start. Some individuals who are dealing with Chapter 7 bankruptcy may have a chance to invest their stimulus on “necessary” products and/or services and help maximize the number of resources that are available during a bankruptcy.
Chapter 7 is the most common type of bankruptcy in our nation, and it allows for an individual to eliminate debt while usually keeping most of their assets. A bankruptcy estate is created after an individual has filed for Chapter 7 bankruptcy and contains all of the assets that an individual has ownership of at the time of filing. The trustee, the party responsible for collecting information for the case, settling debts with creditors, and overseeing the entire bankruptcy process, is usually responsible for creating the bankruptcy estate. Our attorneys will cover this in more detail and explain how your stimulus check may help during your consultation.
Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, the debtor proposes a 3 to 5-year payment plan to pay back some or all of the debtor’s liabilities. The Chapter 13 plan payment must include all the debtor’s “disposable income.” The CARES Act protects the stimulus funds from being included in a Chapter 13 plan payment by excluding the funds received under the CARES Act from disposable income.
We understand that every bankruptcy case is different, and we will work hard to help you put together a plan so that you can get back on your feet and one step closer to a debt free life. If you are thinking about filing bankruptcy, Castle Law Office provides a free consultation for Missouri and Kansas resident. You can call us at 816-842-6200 or you can email us and set an appointment with a Castle Law Office Attorney to discuss your options.
Phone: (816) 842-7100
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