If you’re filing for bankruptcy, a new round of stimulus checks may provide relief. Soon, many Omaha residents will receive sorely needed stimulus relief funds.
Across the United States, many people have lost their jobs because of the pandemic. Along with those jobs, they’ve lost their incomes. In this way, COVID 19 is placing many families at risk.
In a short time, creditors will most likely resume collecting past debts and judgments. When they do, they could take consumer stimulus payments at the worst time possible.
To learn how to leverage your stimulus checks wisely while filing for bankruptcy, keep reading.
Protecting Your Stimulus Funds
In the coming weeks, many Omaha residents look forward to stimulus payments that will help them with necessities such as food and rent. The second round of stimulus checks is expected to start hitting consumer bank accounts as soon as next week.
On December 21, Congress finally agreed to a new $900 billion economic relief package. However, President Trump wants the stimulus check amount raised to $2,000, versus the approved $600.
For this reason, the stimulus funding date and amount are in question. Either way, you need to know what to do with the funds once they arrive.
In most instances, consumers will receive the payments directly in their bank accounts. Those payments will affect either 2019 or 2020 tax returns and income statements.
Except for child support, Congress has protected stimulus payments from federal debt. However, they did not protect consumers from the debt owed to other creditors.
For this reason, many Omaha residents face losing their stimulus checks before they can put them to good use. Creditors could take those funds to pay old debts instead of allowing consumers to meet their current needs.
Nebraska law protects residents from this scenario. However, amid the complex bankruptcy process, Omaha residents may still face wage garnishment and bank account freezes.
Creditors take these kinds of actions quickly. Most often, people don’t notice that they don’t have access to their funds until they need them.
Securing Your Immediate Future
If you’re facing a wage garnishment or execution, creditors could take your stimulus funds. A bankruptcy proceeding can help you to prevent this from happening.
Meanwhile, you’ll need to figure out what to do with your stimulus funds once you receive them. For many, the choices are painfully clear.
People need their stimulus funds to use as intended. Some struggling individuals sorely need their funds to purchase necessities for their families.
If you’re still employed, however, you might wonder how to use your stimulus funds. It’s helpful to use those funds to pay down debts.
Alternatively, you can put the money away for a rainy day. For example, you can save it to cover your rent, mortgage, or utilities in case of an emergency. In these uncertain times, it most certainly helps to build a nest egg if possible.
If society doesn’t find relief from the coronavirus soon, the job landscape is even more uncertain. If you’re still employed, it’s a good idea to start building reserve funds in case things change.
An Alternative Plan of Action for Stimulus Checks
Alternatively, you may have already filed for bankruptcy in light of recent events. If so, you may want to pay down debt that you don’t plan to charge off in your bankruptcy.
For example, paying off a credit card is a great way to access an immediate return on your stimulus funds. At the same time, you’re not risking co-mingling your stimulus funds with earned money, which can get frozen during bankruptcy.
However, you may want to hold off on paying student loan debt. Lawmakers are still deciding what to do about student-debt relief.
For now, the student loan debt collection process is on hold for approximately six months. Lenders are also waving interest fees during this hiatus.
If you don’t use your stimulus funds for immediate needs, paying down debt outside of your bankruptcy is your best option. You’ll especially want to pay down cards with interest rates above 8%.
Nearly a quarter of the workforce is unemployed due to COVID 19. If they haven’t filed for bankruptcy already, many individuals are considering doing so.
Some people worry that stimulus funds will put them over the threshold for bankruptcy. However, there’s no need to worry about this outcome. Fortunately, Congress added a section to the stimulus bill where these funds cannot count toward your income.
Getting Help With Your Bankruptcy
Some families need to file for bankruptcy to put a halt to foreclosure. If you choose to file for bankruptcy, the courts can provide an Order for Relief as soon as you file.
An automatic stay stops creditors and banks from collecting on debts. If your home is already headed to auction, the order can postpone the sale until you finalize bankruptcy.
An Order for Relief can delay the foreclosure process by three to four months. However, a persistent bank might persuade the courts to make the stay shorter.
The bankruptcy process can prove complex. What’s more, bankruptcy laws are currently in the midst of change. For this reason, it’s vital to have an experienced attorney on your side who can guide you through the process.
Experienced Omaha Bankruptcy Attorneys
Now you know more about collecting stimulus checks while in bankruptcy. If you’re facing foreclosure, however, you’ll need a skilled attorney who can protect your interests.
Burke Smith Law can help you find relief from financial stress that can wreak havoc on your life. The faster you resolve your financial issues, the sooner you can get your life back on track.
Our attorneys will work with you through all aspects of your case. You can rest assured that we’ll handle your case directly and not place it in the hands of a paralegal.
Contact Burke Smith Law today at 402-718-8865 or connect with us online. We’re here to help you through the complex bankruptcy process.