Using Stimulus Checks to File Bankruptcy
Can I Use My COVID-19 Stimulus Check to File Bankruptcy?
Stimulus checks are being used more and more frequently for filing for bankruptcy. With debts mounting and collection resuming in the courts, people are using the stimulus checks where it can help the most. Bankruptcy can be a powerful way to deal with all debts at the same time. The stimulus check can go much farther by filing Chapter 7 for a full release of debts.
Stimulus Checks are Similar to Tax Refunds
Tax refunds are also very commonly used to pay for a bankruptcy case. Each year during tax season, bankruptcy filings rise in large numbers. Every March and April are usually the largest filing months for this reason. The tax refund can easily pay for their entire Chapter 7 bankruptcy case. It can also help them catch up on other bills or needs in the home.
Tax refunds are used for an additional purpose, however, in Indiana. Many people wait to receive their tax refund to file for bankruptcy simply to make sure the bankruptcy trustee does not take their refund. Bankruptcy Trustees in Indiana can seize tax refund money in many cases.
Stimulus Checks are similar to tax refunds. They are an infusion of funds from the Federal Government. Because they are out-of-ordinary funds, stimulus checks are perfect for paying for a bankruptcy case. The difference between tax refunds and stimulus checks, however, is that the bankruptcy trustee cannot take stimulus funds. Stimulus checks are completely “exempt” from being seized during bankruptcy.
Using the Second or Third Stimulus Check to File Bankruptcy
A wave of stimulus followed by a second wave of checks is likely to occur during January and February of 2021. These checks could be used at a higher level to file bankruptcy cases simply because collection and debts have mounted during the last 9 months. In addition, many people are anticipating the COVID-19 crisis to slow down as 2021 develops. This will cause more and more people to refocus on their financial situation. It will also likely cause creditors to resume collecting on accounts more aggressively.
Using the last wave of stimulus checks may be the perfect way for many people to get a release from their debts. Using funds this way can bring true relief after this recent prolonged time of difficulty and stress. Filing Chapter 7 bankruptcy with stimulus funds can help people feel that their lives are truly getting back on track.
For more information on filing bankruptcy in Indiana, make sure to schedule a free consultation today. You can schedule the free consultation online here or you can contact us now.
