With a quarter of the state’s workforce out of work due to the COVID-19 crisis, more individuals may be considering filing for bankruptcy or already have. However, some workers are concerned that if they accept the stimulus check from the government, their overall income will exceed the bankruptcy threshold and disqualify them for bankruptcy.
Here’s the answer: It will not and cannot.
In fact, there is fine print in the stimulus bill that states that if you receive this stimulus, it will NOT be used against you when filing.
Bankruptcy and COVID-19
If you are struggling, please know that you are not alone.
Many organizations, businesses, and individuals may be headed for bankruptcy. In fact, the Xtreme Football League (XFL) filed for Chapter 11 Bankruptcy on April 13, and this is likely just the beginning.
Although there is a limit regarding how much income an individual can make in order to file for bankruptcy, the stimulus check will not count against it. This fact is noted in the Coronavirus Aid, Relief, and Economic Security Act.
“We’re expected to get a massive influx of bankruptcy filings in the next month or two,” said Attorney Bryan Yaldou, who specializes in personal bankruptcies among other areas of expertise. “This stimulus payment that is going to be sent out during this pandemic is not going to be counted as income for the purposes of qualifying for bankruptcy.
“The CARES Act that was recently passed makes it clear that this was not to be counted as income.”
Congress did not want individuals to have to decide between filing for bankruptcy and accepting the stimulus check in order to pay their bills. Because this economic crisis places many people in a tough situation, the stimulus checks are intended to help families stay afloat. Some individuals or families may use these checks to pay bills, and in some cases that’s helpful and wise.
However, the bills will only return the following month, leaving families in the same scenario they are in now.
Instead, individuals who are finding themselves in a dire financial situation may wish to use this resource to begin a bankruptcy filing, which may mean greater benefits in the long run. Some forms of bankruptcy allow individuals to wipe out all of their debt once and for all, and then they can start to rebuild their credit quickly.
Individuals who would like to know more about bankruptcy options may contact the Yaldou Law Firm to see which route is right for them.
“I won’t do it unless it’s better than what they’re doing right now,” Bryan said.
If you are considering filing for bankruptcy but are unsure if you should or if you qualify, call or message us to schedule a free consultation.
We’re Going Digital: File for Bankruptcy Remotely
![According to the CARES Act, a stimulus check will be treated as a refundable tax credit, and this applies to cases filed before or after enactment of the law. To make filing for bankruptcy easier, the Yaldou Law Firm website features an option that allows residents to file online after a consultation with one of our attorneys. In this image, a concerned man is sitting in a coffee shop in front of a laptop.](https://toomuchdebt.net/wp-content/uploads/2020/04/Yaldou-_-Blog-Stimulus-Check-inner-image-1165941362-300x200.jpg)
According to the CARES Act, a stimulus check will be treated as a refundable tax credit, and this applies to cases filed before or after enactment of the law. To make filing for bankruptcy easier, the Yaldou Law Firm website features an option that allows residents to file online after a consultation with one of our attorneys.
To help residents struggling through this difficult time, our law firm is going virtual. Individuals may file for bankruptcy completely online on our website, www.toomuchdebt.net, after a consultation with one of our attorneys.
“Clients may submit information and documents on our website. We can complete bankruptcy cases completely by phone and online. This virtual process is quick, safe, and easy,” Bryan said. “We want our clients to know that we are still here for them and ready to help.”
Individuals who are considering filing must first discuss their situation one-on-one with one of our bankruptcy attorneys. If you decide that bankruptcy is the right option for you, we will provide you with a customized URL that will allow you to file safely and easily through our website. You can provide us with applicable documents online as well, and if you need assistance with the technology, we will be happy to help you.
“Bankruptcy might not be the ideal solution for everyone,” Bryan said. “Some individuals, however, are struggling to make ends meet and finding themselves overwhelmed by unmanageable debt and the stress that comes with it. Bankruptcy could help them get back on their feet and gain some peace of mind after this crisis is over.”
Bankruptcy Steps and What You Will Need to File Remotely
Bankruptcy cases differ based on debts, family status, income, and many other factors. Typically, however, these cases include the following steps.
1. Consultation with a Bankruptcy Attorney
During a free consultation, we will discuss your income, debts, obligations, assets, current living arrangements, and several other factors in order to provide you with an informed opinion regarding whether filing for bankruptcy is advisable. Consultations are available through a video conference or video call.
After scheduling the consultation, we will provide you with an intake form to fill out prior to the meeting. You may complete this form right from your phone or computer, or you may call us for assistance in filling it out.
2. Securing Our Services and Compiling Documents
Once you make the decision to file for bankruptcy through our law firm, a retainer agreement will be executed. It will outline our terms and services, and it can be sent and signed electronically. Payments also may be made over the phone or online.
At this point, we will also provide you with a list of documents you will need to compile in order to proceed with your case. These materials may not all be needed when you file, but you most likely will need them at some point during the course of the case.
Depending on the type of bankruptcy and various other matters, these documents may include but are not limited to:
- Six months of paycheck stubs
- Six months of bank statements
- Tax returns for the last two years
- Statements pertaining to:
- Investments
- Retirement
- Home mortgages
- Car loans
- Credit cards or other debts
- A list of items you own, such as jewelry, kitchen appliances, and gardening supplies
- A current credit report
- Your identification cards
- Proof that you attended a credit counseling course, which is typically required in bankruptcy cases
You may send us these documents by email or fax, or you may take a picture of them and text them to us.
![Rebuilding your credit after a bankruptcy will take some work, and financial advisors or our attorneys can provide you with tips on how to do so. Nevertheless, with some effort, you can see your credit rating slowly improve soon after your debts are discharged. In this image, a man reviews his credit score on a tablet. The credit score show on the tablet is 680.](https://toomuchdebt.net/wp-content/uploads/2020/04/Yaldou-_-Blog-Stimulus-Check-Bankruptcy-credit-score-1149763793-300x200.jpg)
Rebuilding your credit after a bankruptcy will take some work, and financial advisors or our attorneys can provide you with tips on how to do so. Nevertheless, with some effort, you can see your credit rating slowly improve soon after your debts are discharged.
3. Filing Your Case
Your filing appointment can now occur by phone.
First, we will set up a time to review your bankruptcy petition and schedules. We will then send a copy of your completed petition for your review, get your permission to affix your signature, and then electronically file your case through the court.
4. Going to Court Virtually
The meeting you will attend is known as the 341 Meeting of Creditors, but you do not have to physically appear in court during this pandemic.
Your meeting will instead be held over the phone. You will receive a phone number and access code to use on the day of your scheduled meeting. In addition to yourself, those present at the meeting will include your attorney and your assigned trustee.
5. Discharge of the Case
Bankruptcy cases are “discharged” 60 days after the court meeting. This means you are no longer liable to pay the applicable debts as approved.
Although bankruptcies stay on your credit report for 7 to 10 years, that does not mean your credit rating will be low for the entire duration. In fact, you can begin rebuilding your credit almost instantly after the discharge even though the bankruptcy is still on your report. Many people find themselves with a respectable credit score within a few years if they work to improve it.
Brownstown, MI 48134