As of this writing, our nation has been battling the COVID-19 health crisis for ten months. Hundreds of thousands of Americans have lost their lives to the virus. Even more have had their lives torn apart by its financial consequences. They have lost their jobs or had their incomes significantly reduced. If you’re reading this, there’s a good chance you or someone close to you are among the virus’ victims.
As a second round of stimulus benefits is issued, you may be wondering if those benefits will be protected if you decide to file bankruptcy. Simply put, yes. While the first round of benefits were not expressly protected by law, the United States Trustee took the position that those funds should not be treated as unprotected by Chapter 7 trustees. None of my clients who filed at that time were required to turn those funds over. Nonetheless, most of my colleagues and I were counseling clients to spend the funds if they received them before their cases were filed.
The current round of benefits are expressly protected by law.
However, you may still want to wait to file bankruptcy. If your income has been disrupted and you are struggling to pay rent, delaying bankruptcy will eliminate any rent arrears that arise until you land back on your feet. Bankruptcy may be the first step you need to take to start all over. It can eliminate rent arrears, credit cards, car loans, medical bills, and other consumer debts.
If you’re struggling with your debt, we’d be happy to talk with you to see if bankruptcy might be a good option and when the best time to file would be. Right now, we are offering free phone and video consultation. You can schedule an appointment by clicking here.