2021 Federal Stimulus Payments May be at Risk
The Congress just passed a bill, known as the American Rescue Plan, giving Americans up to $1400.00 in "stimulus money".
You may know that the stimulus money that was paid in late 2020 was off-limits to creditors. However, that protection was not included in the 2021 law due to the rules under which the bill had to be passed.
Therefore, I understand that the 2021 stimulus money is NOT protected from creditors.
I haven't read through the legislation yet, but if the money is not protected from creditors it is presumably not protected from bankruptcy trustees either. If you have unused wild card exemption you should be able to use that to protect the stimulus money from a bankruptcy trustee, but if you are using the state exemptions, or if you have used up your wildcard exemption, the trustee may be able to demand the money if you still have it when you file bankruptcy.
This is a developing story, so things may change, but I thought I should give you a heads up about this issue.
As always, if you have questions about bankruptcy, please call me at 320-252-4473.