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Can my CARES Act stimulus payment be taken by creditors? The unfortunate answer is ‘yes.’

Can my CARES Act stimulus check be taken by creditors? The unfortunate answer is 'yes.'

By Tracy L. Hirsch

If you’re worried about your stimulus check being taken, here’s what you can do to prevent that from happening.*

Over this past month in the United States, millions of stimulus checks have gone out to individuals who meet the income and household requirements.

While some have received their payments, there are still others who are waiting for a direct deposit or a check in the mail, including many Louisville residents.

If you have creditors coming after you for (months or years worth of) unpaid debt, there are two ways that you can protect your stimulus check:

If a creditor has sued you, any money that’s in your bank account can be garnished, including your stimulus payment.

1.) Remove the money from your account as soon as you receive it. If you have creditors coming after you, and your stimulus check was recently deposited into your bank account, it is best to take the money out of your account to use it to pay for groceries, gas, and other necessities.

Once you have the cash in your hand, creditors cannot take that from you.

However, if the money is sitting in your bank account, they can legally obtain permission to take it out in order to get a payment for the debt that you owe them. This is called a “garnishment.”

If your stimulus check is going to be mailed to you instead of being directly deposited into your bank account, you should cash the check at the bank when you receive it instead of depositing it into your bank account.

If your bank is only currently offering virtual assistance, then you can do a mobile deposit of the check, and as soon as it gets approved, go to your bank’s ATM, and take out all of the money.

2.) File for bankruptcy if you qualify.

If you haven’t received your stimulus check yet, and you have creditors coming after you, it may work in your favor to file for bankruptcy. That way, when your check comes in the mail, your creditors won’t be allowed to go into your bank account to take it out (and any other funds that you have in there).

When you file for bankruptcy in Kentucky, it immediately protects your paycheck and the money in your bank account. This is due to a bankruptcy rule called the “Automatic Stay,” which means that once you have officially filed for bankruptcy, creditors can’t take your house, car, or paycheck, and the money in your bank account stays in your bank account.

Just like a tax refund, you can also use your stimulus check to pay for the filing fees and attorney fees needed to file your case. If you’re unsure whether or not bankruptcy will benefit you, you can set up a free consultation with me. I am currently offering phone consultations, where you and I can discuss your options from the comfort of your own home.

Want to  learn more about my virtual consultations? Click here to get all of the details!

You can text or call my personal cell phone 7 days a week at (502) 435-2593. Remember, we’re in this together, and I’m here to help.

All the best,

Tracy L. Hirsch

Attorney-at-Law

* The content in this article should not be construed as legal advice. If you need legal advice, you can set up a free phone consultation with me or meet with any local, licensed bankruptcy attorney. *

Need a free consultation? Text or call me at (502) 435-2593!

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The Top 3 Things You Need to Know About Your Coronavirus Stimulus Payment

The Top 3 Things You Need to Know About Your Coronavirus Stimulus Payment

By Tracy L. Hirsch

Here’s important information about when the payments started, when to expect your payment, and the amount you’ll most likely receive.

While millions of Americans have received their EIP (“Economic Impact Payment”) either through direct deposit or a paper check, many still haven’t received theirs, including residents in Louisville, Kentucky.

Here are the top 3 frequently asked questions regarding the EIP stimulus checks and their answers:

1.) When did the stimulus payments start? On April 11, 2020, the IRS started depositing money into tax payers’ checking (or savings) accounts if those tax payers had their most recent federal tax refunds directly deposited into a bank account.

The IRS started mailing paper checks on April 20, 2020 for tax payers who did not have bank account information in the IRS database. The IRS has also started directly depositing payments into SSI recipients’ accounts this week.

If you meet all of the qualifications for a stimulus payment, and still haven’t received one, the CARES Act website may be able to give you answers. 

2.) How much money will I receive? There are a specific set of qualifications for the CARES Act stimulus package, and those who meet those requirements will receive a stimulus payment. Here’s who qualifies and what they’ll receive:

> Unmarried/single individuals who filed tax returns for 2019, and whose adjusted gross income or 2019 is $75,000 or less, will receive $1,200. For every extra $100 of income, the stimulus payment goes down by $5, and the maximum gross income cutoff is $99,000.

> Married couple who filed tax returns for 2019 jointly, and whose adjusted gross income for 2019 is not higher than $150,000, will receive $2,400. For every extra $100 of income, the stimulus payment goes down by $5, and the maximum gross income cutoff for couples is $198,000.

> A head of household who filed tax returns for 2019, and who adjusted gross income is not more than $112,500, will receive $1,200. For every extra $100 of income, the stimulus payment goes down by $5, and the maximum gross income cutoff is $136,500.

> If you haven’t filed your tax returns for 2019, but you have young children, you’ll still receive $500 for every qualifying child under the age of 17.

> Most SSI, SSDI, Railroad Retirement benefit, and VA benefit recipients who have not filed a 2019 tax return (and who don’t plan to) will receive $1,200.

> Please note that there are exceptions to these categories, and more details can be found here.

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3.) Why haven’t I received my stimulus payment yet? If you haven’t yet had any money directly deposited into your bank account or you haven’t gotten a check in the mail, there are few things you can do.

> The IRS website has a list of FAQs about receiving payments here. It also has a list of FAQs with more details about the requirements for these payments here.

If you don’t find the answer that you need, go to the next step below.

> You can go to the IRS website to check the status of your personal payment here. 

> If you haven’t filed a 2019 tax return, and want to find out if you need to, click here. 

We know that this is a stressful time, and waiting on your stimulus payment makes it even harder. The IRS has encouraged people to regularly check their website for the most up-to-date information.

Remember, we’re all in this together.

All the best,

Tracy L. Hirsch

Attorney-at-Law

Need a free consultation? Text or call me at (502) 435-2593!