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 Appropriations Act, 2021” aka The Covid-19 Economic Relief Bill.