Q: We filed chapter 7 bankruptcy on 2/23/2021. We have 4 kids and got the 3rd stimulus. Can trustee take our stimulus?
since we filed before stimulus was approved is there a way to protect the money from being taken. My husband is going back and forth from working and being laid off as he's a union construction worker. he just got laid off again today. our trustee meeting is Tuesday. this money would help keep us afloat while he's out of work again.
our attorney is having us hold on to stimulus as the trustee may want to take it.
A: When you file a Ch. 7 bankruptcy case, a "curtain" drops on that date, and your bankruptcy "estate" includes whatever property (less your exempt property) you have on that date, and same end date applies to your debts. Income earned and assets acquired after your filing date are yours, not includable in your bankruptcy estate (a tax refund is considered an asset accruing prior to the bankruptcy, because it is drawn from pre-petition wages). Another exception is an inheritance, received within six months after entry of your Ch. 7 Discharge. Consequently, you should be able to keep your 3rd stimulus payment. Talk with your lawyer about this issue, as the Ch. 7 Trustee may raise the issue at your 341 meeting.
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