Boca Raton Bankruptcy Lawyer

The Bush Stimulus Plan and Its Relationship to Bankruptcy

In February, the House of Representatives and the Senate agreed upon a stimulus package. It has been designed to give the middle classes some help by putting more money back in their pockets. The theory is that this money will then be spent which will stimulate the economy.

A large number of taxpayers, by this plan, will receive several hundred dollars. Individuals who filed a tax return the previous year will receive $600. Couples who file jointly will receive $1200. Even people who did not file a tax return the previous year but made more than $3000 will receive a check for $300. People with children will receive roughly an additional $300 per child.

In addition to the checks for tax payers, the plan contains a large number of business incentives and assistance for homeowners who are facing mortgage foreclosures.

As happy as this stimulus plan is for the majority of the country, it may not be great for individuals who have or will file for bankruptcy. If an individual has already filed for bankruptcy, the stimulus check may not have an effect. If an individual is planning on filing, the stimulus check needs to be counted as a potential asset and needs to be on any bankruptcy paperwork

If an individual is filing for Chapter 7, he or she may be required to turn all or part of the rebate over to the trustee; however, this may be exempt due to laws in your particular jurisdiction. The same situation may be true for individuals who are currently in Chapter 13 bankruptcy.

If an individual intends to file for bankruptcy within six months of receiving the tax rebate, the rebate will be added to other income for purposes of the means test. Because this will be received shortly after the tax refunds are mailed, the two could combine to make an individual ineligible for bankruptcy.

If you are considering filing for bankruptcy and would like to discuss the effects such an action will have, contact the Boca Raton bankruptcy lawyers of Klein Attorneys at 561-353-2800 to discuss your case and to determine your legal options.