Monthly Archives: January 2021

“This call is from the department of social security…” No, it’s not, and it is not because you filed bankruptcy.

So this morning I received two phone calls in a row, from a local number, with a recording advising me that:

“This call is from the Department of Social Security Administration. The reason you have received this phone call from our department is to inform you that we just suspended your Social Security number because we found some suspicious activity.”

It’s a scam. I know it’s a scam because it sound ridiculous on the phone, and because I get a couple of calls a week from clients who are suddenly frightened because the timing of the call is suspiciously close to some kind of event in their bankruptcy case. But don’t worry, it’s a scam.

The FTC has this wonderful quote on its website:

The real SSA will never call to threaten your benefits or tell you to wire money, send cash, or put money on gift cards. You can’t believe the numbers on your caller ID. Scammers can easily fake those.

The only suspicious activity I’ve done in the past week is taking a nap between two alligators. And to be honest, I’m not sure they were even real!

What will happen to my 2021 $600 (or $2,000) stimulus when I file bankruptcy?

Nothing. It’s yours to keep. Use it to pay your bankruptcy attorney.

I had to edit this post today (January 8, 2021). A friend of mine who happens to be a very academically gifted bankruptcy practitioner, read the new bill carefully. The new stimulus payments are NOT property of the bankruptcy estate. This means that a bankruptcy trustee cannot take them from you.

Originally, Congress forgot to exempt (or protect) the stimulus money from the bankruptcy trustee. When funds are exempt, they are protected from collection by the trustee. For example, if you receive social security benefits each month, these funds are exempt. The trustee cannot take your bank balance of social security benefits and use them to pay creditors. Your stimulus money is not exempt.

None of the chapter 7 or chapter 13 trustees are going to require you to turn over your stimulus money to the bankruptcy estate. This means that you can file bankruptcy today, receive your stimulus tomorrow, and the trustee will not take it from you.

That being said, if you file bankruptcy before you spend and receive your 2020 tax refund monies, you will lose those monies. See here: How can I protect my 2019 tax refund if I file bankruptcy in 2020?

This means that you CAN file bankruptcy before you receive the stimulus money, but you had better wait to file bankruptcy until AFTER you have received and spent your tax refunds.

Here is the text for the “Consolidated Approriations Act, 2021” aka The Covid-19 Economic Relief Bill.