As many who have either considered filing or who have already filed for bankruptcy know, the Bankruptcy Act determines whether or not one you file a Chapter 7 Petition with no presumption of abuse with something called the “Means Test.”
The Means Test is found in the United States Bankruptcy Code, 11 U.S.C. §101(10A)(B)(ii). It stated, before the passage of the Stimulus Package, that only such income as Social Security Benefits, payment to victims of war crimes, payments on behalf of international terrorism, or monthly compensation, pension, pay, annuity or allowance paid for disability, or combat-related injury would be excluded from the Means Test. See, 11 U.S.C.§101(10A)(B)(ii) for more details on this
Under the Stimulus Package, in Section 1113(b), Congress has decided that these stimulus payments to the American people should not count against them when it comes to bankruptcy. As such, in the Stimulus Package, Congress is amending the Bankruptcy Code as follows: “[e]xclusion from Current Monthly Income.—Section 101(10A)(B)(ii) of title 11, United States Code, is amended as follows: (V) Payments made under Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019 (COVID–19).’’
This means that if you believe that you are eligible for a Chapter 7 Bankruptcy, but were concerned that the Stimulus Payment would cause you to be over the Chapter 7 Median Income, do not fear. This amendment to the Bankruptcy Code will exempt those funds.
If you want to discuss your specific situation, feel free to contact the Law Office of Stuart M. Nachbar, P.C., at (973) 567-0954, or email via our website www.snanj.com. We are now handling initial matters (consults) via Zoom Media, Ring Central or just via the phone if you are more comfortable in that setting. We have the ability to send out our client question sheets and credit counseling via email. We offer a free no-cost consult to every person who mentions this advertisement, and we are conveniently located at 354 Eisenhower Parkway, Suite 2025 in Livingston, New Jersey. We handle Chapter 7 and Chapter 13 cases for all of Northern and Central New Jersey.