IRS Stimulus - keep it or lose it?

[krielly]

I was perusing the IRS Website yesterday and found this:

......doesn't sound too promising.......

http://www.irs.gov/newsroom/article/0,,id=179095,00.html

see 4th paragraph under "Exclusions"

"Stimulus payments will be subject to offset against outstanding tax and non-tax liabilities in the same fashion as regular tax refunds."

Like anything else, I'm sure it's all subject to interpretation, but this doesn't sound too optimistic to me.

Interesting, when you read the 5th paragraph it says:

"In addition, the IRS emphasizes the stimulus payments will not count toward or negatively impact any other income-based government benefits, such as Social Security benefits, food stamps and other programs."

Seems odd that they would offer protection to folks receiving government assistance...........(don't get me wrong, I'm glad they do) but yet not offer the same protection to folks like us............

K

[justplaintired]

Sounds this will be treated just like a refund to me. I am new to this bk thing, but that sounds to me like we best plan on turning it over. How depressing.

I heard on a morning new show here not long ago that part of our economy's problem can be blamed on cc's and now they are going to take people's rebate check and give it to them. That doesn't seem fair. How will that stimulate the economy?

Oh well, like someone wrote on another thread, to be debt free is worth it. Just could have fixed a few problems with our cars, and maybe even saved a little towards school clothes for the kids. It appears now blood sucking credit cards will be getting it. Hope they have fun splitting $1800 between $32000 in cc debt. Looks like each card might get a little over $150 a piece! Now that is kinda funny when you think about it! LMAO

[Teddy]

I'm pretty sure my attorney said that so far, they aren't taking them. I emailed my attorney and will let you know if he answers.

[phoenyx]

I'm pretty sure my attorney said that so far, they aren't taking them. I emailed my attorney and will let you know if he answers.

Unless something on a large scale happens, each bankruptcy district could very well act differently than each other. Many of the details on how a trustee handles specific parts of a bankruptcy case differ from district to district, so some districts may try taking them whereas others may not.

Also, no one yet knows what the trustees will try doing, because no one has received a stimulus payment yet. Until bankruptcy attorneys have past information to go off (which they don't have yet) from their specific bankruptcy district, they're just guessing unfortunately along with the rest of us.

[AlmostFree]

The "non-tax liabilities" are generally delinquent child support payments and other non-tax federal debts such as student loans, etc. Also, delinquent state taxes can be used as a refund offset.

[phoenyx]

Generally speaking, the ways the IRS will offset stimulus payments are mainly in ways that wouldn't be dischargable in a bankruptcy anyway. So, even if the taxpayer doesn't get the cash, most of the time they will be getting a reduction in a non-dischargable liability which is still good.

Like, unless outstanding tax is income tax more than three years old, and meets some other requirements, it's non-dischargable. Child support and student loans are generally non-dischargable as well.

[HHM]

Yep, it will be interesting to see how it gets handled. Not even BK attorney's yet know how this will be handled, but I imagine we will know in the next few months.

I suspect the trustees are not going to touch it. In the grand scheme of things, the amount of the rebate is not that great (I think something like $600 for single, $1,200 for married, and +$300 per kid). Also, I think trustees realize that the rebate would be litigated, so the cost/benefit of doing so for a ONE time rebate event, is probably not worth it.

Also, I think there would be a PR backlash if a trustee did try to take it. I know if I was an attorney, if the trustee tried to take the rebate, I would be calling the local news.

[Teddy]

you can keep a tax _refund_ check if it's below $1000
-the courts have not decided yet on how to handle the _stimulus_ check; so far they are letting debtors keep them

That was my attorney's answer - I am in Indiana. It looks like he probably isn't sure what they will do with the rebates either.

Interesting about the tax refund statement though. I don't get a rebate this year so I don't care about that part.

[justplaintired]

I am also in Indiana and do get a refund, not a ton like others I have read on here get, but enough to have filed bk. We even had enough to buy a Valentine's Day supper, $54 left after giving the attorney $1324 that same day.

Anyway, our attorney basically said he wasn't sure how they will handle this rebate ck. I guess once someone gets their, we will know how it will be handled. Seems if the government wants to stimulate the economy, best thing they could do is say Hands Off to trustees. I would think surely if the government did this, all trustees would have to abide by the same rules.

Sounds like they should start arriving in May, so we will all know soon enough. We should have filed by then, maybe even had our 341. I guess our trustee will tell us then what to do with it. Ours should be direct deposited since our tax ck was. Either way, we won't touch it until we know what to do with it.

[HHM]

Please direct all posts about the stimulus rebate to this thread

http://www.bkforum.com/showthread.php?t=22621