On April 9, 2020, the IRS started sending stimulus checks to individuals under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 (Act). People earning less than $75,000 will receive $1,200 and married couple earning less than $150,000 will receive $2,400. Additional $500 will be paid for each qualifying child under the age of 17.
Whether you can keep the stimulus check in bankruptcy depends on when you are going to file the bankruptcy, where you live and what other assets you have. Arizona has only a $300 exemption for funds in the bank account ($600 for married couple). In order to protect your stimulus check, it is important to discuss your situation with an experienced bankruptcy attorney.
If you are considering filing for bankruptcy, call us at 480-425-2009 or contact us via our website to schedule a free confidential consultation and we will make sure your stimulus check is protected and you get the maximum relief from your debts through bankruptcy.
Please note that this article does not constitute a legal advice. We simplified the law, excluded nuances in law in order to outline the treatment of the stimulus check in bankruptcy.
Each year 8 out of every 10 new businesses in the United States fail. Over time, that number grows to 9 of 10 businesses. When a corporation or limited liability company is unable to service its debt or pay its creditors, the company has many choices, among them to file Chapter 7 or Chapter 11 bankruptcy. In Chapter 7, the business ceases its operations altogether, a trustee sells all assets and distributes proceeds to its creditors. Chapter 11 provides tools to restructure debts and save viable businesses and jobs.
You’d be surprised how many well-known companies filed Chapter 11 bankruptcy and not only survived, but thrived after the process — companies like American Airlines in 2011, GM in 2009, Bill Heard Chevrolet, the largest Chevy dealer in 2008, Delta & Northwest in 2005, US Airways in 2004, United & US Airways in 2002 and thousands more.
How Chapter 11 works
The first step for the company is to hire a bankruptcy attorney, preferably an attorney with years of experience representing debtors in Chapter 11 bankruptcies. The Chapter 11 reorganization is very complicated process, which is why an experienced attorney is so critical in making the process a success.
The bankruptcy attorney will assist the company to file a Chapter 11 bankruptcy petition with the bankruptcy court. The next step is for the company to create a reorganization (or liquidation) plan. Unless, the debtor proposes liquidation, it should be a viable plan to keep the company operating on a long-term basis. The plan can propose to sell some assets, reject leases and close stores, restructure debts, reduce some debts, extend debt maturity and interest rates, modify rights of some secured creditors etc. All creditors are placed into classes and they vote on the plan. In order for the bankruptcy court to confirm the plan, at least one class of creditors whose claims are impaired has to vote for the plan and the plan has to be fair and equitable and has to not discriminate unfairly. If the plan is confirmed, the restructured debts became the obligations of the restructured company.
A company has to be represented by an attorney in Chapter 11. If your company is facing financial difficulties, call experienced Chapter 11 attorney Irena Juras at 480-425-2009 to find out what tools Chapter 11 provides for your company or contact us via our website today!
Administrative fees increase as follows:
- For the filling of a new petition under Chapters 7, 12 or 13, $75.00
- For the filing of a new petition under Chapters 9, 11 or 15, $550.00
Fees for filing a new bankruptcy petition will increase as follows:
• Chapter 7 filing fee increases to $335.00
• Chapter 9 filing fee increases to $1,717.00
• Chapter 11 filing fee increases to $1,717.00
• Chapter 12 filing fee increases to $275.00
• Chapter 13 filing fee increases to $310.00
• Chapter 15 filing fee increases to $1,717.00
Lots of people considering filing for bankruptcy fear that they may lose their home.
First of all, there are several types of bankruptcies (for individuals – Chapter 7, chapter
11 and chapter 13). The answer to the above question may be different depending on which
bankruptcy you file. If you file Chapter 7, you are current on your mortgage and there is
no equity in your home (or equity up to certain exempt limit, which is different in each
state, e.g., $150,000.00 in Arizona), you should be able to keep your home. If you are
behind on your mortgage payments, Chapter 13 bankruptcy may be better option for you.
Chapter 13 gives you a tool to cure the arrearage over time and thus, allows you to save and
keep your home. Chapter 11 is similar to Chapter 13, but it is more expensive type of
bankruptcy, mainly for people whose debts exceed the Chapter 13 debt limits. In summary,
the filing of the bankruptcy does not necessary mean losing your home. To the contrary,
certain types of bankruptcy may give you another tool to protect and keep your home. Since
your home is important to you and your family, our recommendation is to consult with an
experienced bankruptcy attorney how to protect your home. Contact us to schedule a free