A tax break known as the Child Tax Credit gives households a credit for each eligible kid. The Child Tax Credit payments were increased and made available to families on a monthly basis starting in July 2021. These subsidies are meant to help poor families with children who may be affected by the pandemic.
Child Tax Credit payments are typically regarded as exempt income in bankruptcy. This implies that these payments are not taken into account when figuring out whether you qualify for Chapter 7 or Chapter 13 bankruptcy by calculating your monthly disposable income.
This exception does have some restrictions, though. The bankruptcy court might view these payments differently, for instance, if you make a high income and the Child Tax Credit payments greatly raise it. Additionally, the bankruptcy court might count these money as a portion of your disposable income if you get the payments but do not use them for essential costs like rent or utilities.
COVID relief money have been made available by the federal government in a number of ways, including stimulus payments, unemployment insurance, and small business loans. These funds were created with the intention of helping people and companies who were struggling financially as a result of the pandemic.
COVID relief funds are typically regarded as exempt income in bankruptcy. There might be some restrictions on this exemption, similar to those that apply to Child Tax Credit payments. The bankruptcy court may consider funds you get from a COVID relief fund, for instance, as part of your disposable income if you do not use them for necessary expenses.
Payments made under the Child Tax Credit and COVID relief monies are often regarded as exempt income in bankruptcy. But, depending on your particular situation, there can be restrictions on this exception. It is crucial to consult with a knowledgeable Houston bankruptcy lawyer if you have received these kinds of funds and are thinking about filing for bankruptcy to determine how they will be handled in your case.