Stimulus Checks and Chapter 7 Bankruptcy in Colorado
Finally! the Relief bill was signed into law and Stimulus checks have begun to be paid to many in need.
People ask me if the stimulus money will be taken in bankruptcy, and it will not. The United States Trustee’s position is that these funds are benefits designed to help folks pay their bills during the pandemic, and not assets subject to seizure by bankruptcy trustees.
One problem many people who need Chapter 7 bankruptcies have is coming up with the money for lawyer’s fees to pay for their case. While we at Mile High Bankruptcy have worked hard over the years to keep costs down, and always offer payment plans for those who need one, raising the money to pay the lawyer can be a challenge.
That is why many people wait to file bankruptcy until they receive their tax refunds—the one time of the year they have a lump sum of cash to take care of their debt problems. Each year we become very busy at this time of year for that reason. I feel good about the process for clients as they can consolidate everything at once and obtain a fresh start for the New Year. File taxes, receive refunds, file bankruptcy, receive discharge of debts=FREEDOM!!
Last year, when the first stimulus checks were sent out, we had a significant increase in clients who were able to pay for their bankruptcies with their stimulus check in addition to their tax refunds. This also helped people finance their case if they owed taxes and were not receiving a refund. They were still receiving money from the government to pay their lawyer to GET OUT OF DEBT, a true need for many people.
While currently bankruptcy filings are down (moratoriums on garnishment and foreclosures and temporary increases in exemptions have held back creditor collections), I feel that eventually these restrictions on collections will be lifted and the creditors will again become aggressive in wanting their money. Also, during the pandemic consumer debt has increased as people have been forced to borrow more to make ends meet after job losses and other financial problems.
The past year has been a strange and difficult one for many, but I am hopeful that now that spring is here, there will be more re-openings of schools and businesses, and a decrease of Covid cases as more and more people become vaccinated. In short, there is light at the end of the tunnel, and this may be a great time to get a fresh start to take advantage of better times to come.
So, in closing, if you need a Chapter 7 bankruptcy and money is tight, maybe you will receive a Stimulus check which would help pay for a new financial beginning and fresh start.
Feel free to call me, Peter Milwid, at 303-831-0733, if you want to ask questions about Chapter 7 Bankruptcy
