Nope, they’re safe.
On March 25, 2021, the United State Justice Department issued a “NOTICE TO CHAPTER 7 AND 13 TRUSTEES REGARDING TREATMENT OF RECOVERY REBATES AND TAX CREDITS FOR CONSUMER BANKRUPTCY DEBTORS UNDER THE AMERICAN RESCUE PLAN ACT OF 2021.” You can read it here.
In the Notice, the DOJ says that:
Chapter 7 and 13 trustees should not consider recovery rebates or child tax credits in administering estate assets or calculating disposable income in chapter 13 repayment plans.
What this means is that:
- the money is not an asset (so the bk trustee cannot take it in a 7 or a 13), and
- it doesn’t count as income (so it doesn’t increase your chapter 13 plan payment)
Basically, this money was intended to help families, and they get to keep it. It doesn’t help families for a bk trustee to take it, pay creditors, and charge a healthy service fee to debtors for the privilege of taking and administering their money.