Stimulus check Chapter 13?

[hthwmn]

I am a Chptr 13 case in Oregon. I am wondering if each BK court will rule independently on this or if it will be for the entire system, seeing as this is a national emergency rather.

[sophieanne]

I hope there will be some thought put into this situation...these are not normal times..and this stimulus is to help people...I hope there will be some compassion in what is decided.

[Scottowl]

I am in Oregon as well, through the Portland court.
while I definitely would like to hang onto any stimulus check, aren’t they bound by the letter of the law, or is some discretion applied?

This entire situation will likely throw many people out of work for months. I hope all who are in a Ch 13 plan can survive.

[justbroke]

while I definitely would like to hang onto any stimulus check, aren’t they bound by the letter of the law, or is some discretion applied?

Unless the law contains a provision that it is "not" income and not subject to seizure or creditors, then it is unprotected. This happened in 2008 as well when stimulus checks were also at the mercy of the Trustee. While the Wooldridge case may not reflect the feelings of all Chapter 13 Trustees, just realize that there was at least one that actually made caselaw from this.

Now, I would say that a Trustee who would go after a stimulus check, especially since it's not really that big, is simply too authoritarian for me. They are rushing these things through so fast, that they are leaving out all the safety measures into these rapidly developed legislative bills.

This entire situation will likely throw many people out of work for months. I hope all who are in a Ch 13 plan can survive.

We will likely see many bankruptcies and failed businesses.

[Scottowl]

I realize that $1000 is a lot of money to an individual, but it won’t sustain anyone for the 3 to 6 months the virus will take to run its course. Nobody really knows the time frame.

I’m worried about a bankrupt nation before this is over.

[BKinMaine]

Im on a CH13 payment plan now (2 years in). They will have to pry that money from my cold dead fingers if they want it.. Seriously though, my income is being cut in half probably for the next 2 months at least so they can t tell me its "extra" income.. Wont be enough to make me whole for a month. If a trustee pushes anyone for this money, they deserve a good swift kick in the nuts.

[shipo]

Im on a CH13 payment plan now (2 years in). They will have to pry that money from my cold dead fingers if they want it.. Seriously though, my income is being cut in half probably for the next 2 months at least so they can t tell me its "extra" income.. Wont be enough to make me whole for a month. If a trustee pushes anyone for this money, they deserve a good swift kick in the nuts.

I would imagine in your situation you can easily show the money less than offsets your loss of income and as such, you are in a very strong position to keep the full check. My thinking, and it is exclusively mine, is that folks in Chapter 13 who have not suffered any impact on their income due to COVID-19, will probably also be able to keep the full check unless their local rules for tax returns indicate a hand-over threshold of less than the value of the stimulus check.

As has been said a few times, we are in a pretty fuzzy area here with the only recent precedence being set following the 2008 recession; so ain't none of us can say for sure what your individual trustee is going to do. So, keep us posted.

[justbroke]

I don't even think that most Trustees went after the stimulus money. Just a few that are either 100% by the book, trying to make a name for themselves, or just cold-hearted; just my opinion.

[sophieanne]

It looks like everyone should wait to see what the stimulus package includes. There is money for people who have to apply for unemployment due to wage reduction or loss. The plan looks like people will receive the amount they would receive normally for unemployment plus up to an additional $600/week, so a filer could receive the full amount of pay that they are not receiving during temporary/full layoffs. This is for up to 4 months. I know the wording of this is being finalized. This could be helpful to people who are currently being effected by the situation.

[shipo]

sophieanne, LOL, "Hurry up and wait", just like when I was with Uncle Sam's Misguided Children back in the 1970s.

[sophieanne]

shipo - You can say that again...every time they move 2 steps forward, they have to stop and step back for a wording change.

[switch625]

Looks like there is good news for those in BK because of the latest COVID-19 stimulus bill!

The Senate bill contains Section 1113 Bankruptcy. I uploaded both the latest version of the bill and plain English write up that could be a draft or two behind the bill. I copied the Plain English version below.

Section 1113. Bankruptcy

Amends the Small Business Reorganization Act to increase the eligibility threshold to file under subchapter V of chapter 11 of the U.S. Bankruptcy Code to businesses with less than $7,500,000 of debt. The increase unsets (expires) after one year (law goes into effect) and the eligibility threshold returns to $2,725,625.

Amends the definition of income in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy. Sunsets (expires) after one year (law goes into effect).

Clarifies that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments. Sunsets after one year.

Explicitly permits individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due. Sunsets after one year.

This is what is proposed and in the bill. Now it needs to be passed by Congress and signed into law. Would not be surprised if Elizabeth Warren worked this into the legislation.



Stay well and be well.

[justbroke]

We'll wait and see.

[justbroke]

So far, it looks like the text is still in the bill passed by the senate. It removes the stimulus from the definition of "current monthly income" from not only section 101 which defines income, but also touches 1322 and 1325 which are related to Chapter 13 plans.

[lostinnola]

So far, it looks like the text is still in the bill passed by the senate. It removes the stimulus from the definition of "current monthly income" from not only section 101 which defines income, but also touches 1322 and 1325 which are related to Chapter 13 plans.

So what exactly does that mean? People in chapter 13 would get to keep it?