On March 25, 2021, the United States Trustee Program, a division of the Department of Justice tasked with overseeing the bankruptcy process, issued a notice to Chapter 7 and Chapter 13 trustees regarding the treatment of stimulus checks in a bankruptcy proceeding.
Specifically, the notice states that:
- stimulus checks under any of the three relief bills (CARES Act, the Consolidated Appropriations Act, 2021, and the American Rescue Plan) are not property of the bankruptcy estate.
- Stimulus funds received in the form of tax credits are not property of the bankruptcy estate.
- Stimulus checks & recovery rebates received in the 6 months before filing bankruptcy are not part of the means test calculation.
- Stimulus checks & recovery rebates expected after filing are not part of the filer’s disposable income
Any trustee who disagrees with the notice and plans to administer stimulus funds or recovery rebates as an estate asset is directed to contact the United States Trustee’s office before taking any action.
The full notice is available here.
Note: Alabama and North Carolina are not part of the U.S. Trustee Program and this notice does not extend to the Chapter 7 and 13 trustees in these two states.