Stimulus rebate / tax refund - What happens to it in bankruptcy?

[Runnin on empty]

Our trustee took our state and federal returns (which we expected), and we were hoping against hope that he wouldn't take our stimulus check. He did mention at the 341 that he was undecided as to what his disposition was going to be on all of the stimulus checks, but that we were not to spend it until we heard from him either way.

My wife was very upset when we received the letter from him telling us that he was taking it. I was disappointed, but expected it, and figure that the nearly $6K in state/fed/stimulus money we're giving up pales in comparison to the debt we're discharging. I guess I see it as a "tax" on our stupidity that got us to this point in the first place.

[DivorceRuinedMe]

Our trustee took our state and federal returns (which we expected), and we were hoping against hope that he wouldn't take our stimulus check. He did mention at the 341 that he was undecided as to what his disposition was going to be on all of the stimulus checks, but that we were not to spend it until we heard from him either way.

My wife was very upset when we received the letter from him telling us that he was taking it. I was disappointed, but expected it, and figure that the nearly $6K in state/fed/stimulus money we're giving up pales in comparison to the debt we're discharging. I guess I see it as a "tax" on our stupidity that got us to this point in the first place.

OUCH! I'm sorry your trustee is taking yours. I'm hoping against hope that I will get to keep mine. We REALLY need the money right now (as does everybody - LOL). I just HATE HATE HATE that every district, even every trustee is different on subjects such as these. To me, it's entirely unfair how some people's tax refunds get taken while other's don't and now this stimulus thing is going to start the same unfairness again. Life is just so unfair! Okay - I'm done with my pity party now.

[Stilltheone]

I'm wondering the same thing....

We should be receiving $1800 for our rebate stimulus on May 16th....our 341 is May 15th....EEK!!

Has anyone had a trustee that let them keep their check?

[justplaintired]

Well, I talked to our attorney today and was informed if we use it for necessities, home repairs, car repairs, eye exams, dentist, paying off a huge heating bill, paying car insurance up for the rest of the year... and keep our receipts we should be fine, so that's what we are going to do.

We have not filed and she recommended we hold off until after we have spent it down and our checking acct is under the $600.00 mark. That's due to Indiana's exemption for cash on hand.

Our check is due to deposit on May 2nd. She informed me our paperwork is ready to sign and she will just hold onto it until we are ready, so hopefully by June 1st we will be filing.

We are C7, under the median by almost half, met our expenses with no problem $55.26 left at the end of the month. No equity in our home, well just under $1000.00. Thought I'd clarify so this would maybe help anyone in our boat.

Waiting to file isn't what we wanted, but our creditors are not calling since we put them in contact with our attorney and in order to get these things done, we will just have to wait.

[Cali]

Well, I talked to our attorney today and was informed if we use it for necessities, home repairs, car repairs, eye exams, dentist, paying off a huge heating bill, paying car insurance up for the rest of the year... and keep our receipts we should be fine, so that's what we are going to do.

We have not filed and she recommended we hold off until after we have spent it down and our checking acct is under the $600.00 mark. That's due to Indiana's exemption for cash on hand.

Our check is due to deposit on May 2nd. She informed me our paperwork is ready to sign and she will just hold onto it until we are ready, so hopefully by June 1st we will be filing.

We are C7, under the median by almost half, met our expenses with no problem $55.26 left at the end of the month. No equity in our home, well just under $1000.00. Thought I'd clarify so this would maybe help anyone in our boat.

Waiting to file isn't what we wanted, but our creditors are not calling since we put them in contact with our attorney and in order to get these things done, we will just have to wait.

We have to wait too. We paid attorney fees and filing fee the first of the month but won't be filing until the summer.

[danaf]

justplaintired - if you pay your car insurance off for the rest of the year, is your attorney putting it down as one of your monthly expenses? I'd really love to know that.

[justplaintired]

Oh my gosh, I didn't think of that. I didn't even ask that question. Yes our car insurance is in that figure so I best not pay that. I love this forum! That saved me a problem down the road.


She did say we could use it for eye exams, dentist, car repairs, home repairs..., so we best stick to that. She also told us it is alright to pay our gas bill, which at the moment will be about 400.00 by May. I split it up in payments because it got so high. She stressed we HAVE to keep all receipts which we would have anyway, so no problem there.

That's the confusing part to me, what is considered ok to spend it on. We had no tax return to keep receipts for, we used all of it for our attorney. She did say we could stock up on groceries too.

[Bit_Image]

I too have payed my attorney, but I think I will wait a couple of weeks to file so that I can spend my stimulus too. Since I have 4 children, my wife and I stand to get $2400 back, and I dont want to loose that by filing too early.

[TX Bluebonnet]

justplaintired - if you pay your car insurance off for the rest of the year, is your attorney putting it down as one of your monthly expenses? I'd really love to know that.

Isn't the point of budgeting expenses to have the monies in the bank (saved up monthly so to speak) and available when the bills come due? For example, my auto insurance is due every 6 months, in April and October. So, if I pay my $800 April bill now I contend I still need to budget for $1,600 throughout the next 12 months so that I will have $800 available for my October bill and then the another $800 for my next April bill due one year from now. I would think the same would apply if I pre-paid my October bill. I would still need to have that $1,600 come next April. Or is our budget only from our filing date until the end of the year?

[getouttathehole]

If we have been declared no asset does that mean that the trustee is not going after our stimulus? I take it it does since it says there is no dispersement......

[lrprn]

If we have been declared no asset does that mean that the trustee is not going after our stimulus? I take it it does since it says there is no dispersement......

Unfortunately being declared no asset has nothing to do with your stimulus rebate which will arrive after your case was filed. If you're lucky, then your rebate check will arrive after your case is closed. Then there's no question you can keep it.

However, if the check arrives while your case is still active, then your trustee could justify taking the rebate because he/she is in charge of your financial estate from the day you file until the day your case is closed.

Right now no one really knows how ch 7 trustees are going to treat the stimulus payments. Has your lawyer given you any idea about what to expect?

[getouttathehole]

The last time we talked about it he didn't know yet what was going to be done about it but he didn't think it should be taken theoretically. Nothing was said about it at our 341 on the 10th. Ah, it is what it is I guess, right?

[Stilltheone]

Interesting....

I got an email from my attorney last night with an "amended" exemptions form.....she forgot to add our rebate and listed it as an exemption.... I hope this means we get to keep it!

[HHM]

Yes, if the rebate can be exempted, then you will get to keep it. Regardless if the trustees decide to go after them.

The issue is really for those states (most states) that do not have a, or have a very small, general cash and/or wild card exemption and for all states there is the open issue of whether, in a chapter 13, the rebate will be considered disposable income (some chapter 13 trustees are NOT going after it, and some are).

[Stilltheone]

Yes, if the rebate can be exempted, then you will get to keep it. Regardless if the trustees decide to go after them.

The issue is really for those states (most states) that do not have a, or have a very small, general cash and/or wild card exemption and for all states there is the open issue of whether, in a chapter 13, the rebate will be considered disposable income (some chapter 13 trustees are NOT going after it, and some are).

I'm in Wisconsin...I have no clue what our cash exemption is for this state, but I'm glad that it looks like we'll be able to keep it!