Q: We are in a chapter 13 and I'm wondering what will happen to our stimulus check? Considering Michigan shutdown.
My job put me on layoff a week before the shutdown here in Michigan and now our shop is closed like many others. My husband is still working as he is a mechanic but that is a unknown as to how long that will be as its based on business and if there isn't any then he wont be working. So with not bringing in as much money as we did this stimulus check would be awesome to help us get stuff that we need and pay bills that are needed paid as well. I'm just concerned that the trustee is going to want it and with sending him pretty much all our unemployment we will be broke, so this stimulus would be a huge relief. We would receive $2900, we plan on using it to fix things in the house as well as pay bills and get more grocery's trying to stop the day by day buying.
A:
You're probably in luck! Sect. 1113 of the CARES Act, which was just passed by the Senate, says the definition of “income” in the Bankruptcy Code for chapters 7 and 13 will exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy. Also, it clarifies that the calculation of disposable income for purposes of confirming a chapter 13 plan will not include coronavirus-related payments.
If you are in an existing Chapter 13 case, The CARES Act also allows debtors in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.
Keep in mind that the CARES Act still needs to be passed by the House of Representatives and signed by the President before it will become law. For further information, consult with a bankruptcy attorney in your area.
A: Highly unlikely the trustee will take it.
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