Can I Still File Bankruptcy If I Receive a Stimulus Check?

filing a bankruptcyDo you need advice or assistance with a bankruptcy filing? The attorneys at the Loris Law Firm, a Mobile AL bankruptcy law firm, may be able to help you. Filing for bankruptcy during this time may put your stimulus check at risk.

Debt collectors and creditors are not prohibited from collecting debtors CARES act stimulus payments.The Internal Revenue Service is direct depositing and sending checks to individuals who qualify for the stimulus check. If the funds are direct deposited, they may be subject to seizure by creditors or debt collectors. It is possible that some creditors may place a levy, or garnish them, before an individual is able to withdraw funds. The majority of creditors do not have the ability to take money out of a debtors personal bank account, but some creditors can do so. Individuals that have a tax lien will most likely lose any funds that were deposited. Further, the Department of Education can take actions to garnish funds in personal bank accounts prior to taking the debtor to court.

If an individual has a loan from their credit union or bank and they fall behind on a payment, the financial institution has the right to remove the money from the bank account and apply it to the past due loan payment amount. Creditors that hold unsecured debt (e.g., overdue rent, medical bills, personal loans, and credit card payment balances) are required to sue a debtor in court and gain a money judgment prior to garnishing a debtor’s bank account. If you are unsure about if you have any judgment against you, check your credit report, check for any liens in your name, and research court records for judgments against you.

Call us today to set up an appointment with an attorney at the Loris Law Firm, a Mobile AL bankruptcy law firm. We look forward to speaking with you!