You will not lose your 2021 Stimulus Payments
If you File Bankruptcy (Maybe?)
Protection of Stimulus Payments from a Bankruptcy Trustee

The following is from the NCLC Consumer Law Implications of the American Recovery Plan Act
Public Law No. 116-260, Consolidated Appropriations Act of 2021, div. FF, tit. 10, § 1001(a) adds a new Bankruptcy Code § 541(b)(11) to the list of exclusions from property of the bankruptcy estate. It provides that “recovery rebates made under section 6428 of the Internal Revenue Code of 1986” are not property of the estate. The stimulus payments under the Consolidated Appropriations Act were authorized under new section 6428A of the Internal Revenue Code.
The ARPA stimulus payments are provided using this language: “Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after section 6428A the following new section … In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2021 an amount equal to the 2021 rebate amount determined for such taxable year.” See ARPA § 9601(a). The ARPA stimulus payments are therefore authorized under IRC § 6428B. This means that consumers who receive an ARPA stimulus payment may file bankruptcy without having to use a wildcard or other exemption to protect the funds from possible recovery by the bankruptcy trustee.
It is possible that a court may construe section 6428B as a separate statute and therefore not a recovery rebate “under section 6428.” However, this interpretation would render meaningless the enactment of Code § 541(b)(11) because even the stimulus payments under the December 27, 2020 Consolidated Appropriations Act would not be protected—they were authorized under section 6428A, and the earlier stimulus payments under the CARES Act would have already been spent by debtors at the time Code § 541(b)(11) became effective. Such a reading of the statutory provisions would be contrary to Congress’s intent to protect stimulus payments.
Diane’s Musings

Normally we expect math and science to have specific answers, but not so much with medicine and law. The answer may appear clear at one time, but then changes as new facts are known or if those with new view points get involved (like the appellate courts).
In the practice of law the answer to most questions starts with “it depends”. After that statement the lawyer goes on to ask for facts that depict that person’s unique situation. That person answers the questions, many times guessing at what the lawyer meant by certain terms or giving the answer they think the lawyer wants to hear. The lawyer then answers the question (based on what may be false “facts”), but adds “different courts may have a different answer and we cannot guess what the final answer will be”.
Moral here – NEVER GUESS AT THE ANSWER FOR ANY QUESTION ASKED BY A DOCTOR OR LAWYER.

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
In Case You Missed It
Published On: February 23, 2025
The National Consumer Law Center (NCLC) is warning that the Trump Administration's actions to shut down the Consumer Financial Protection Bureau (CFPB) will devastate working families, honest businesses, and the economy. "Millionaires and billionaires are [...]
Published On: February 23, 2025
U.S. credit card debt reached a record $1.17 trillion In the third quarter of 2024, U.S. credit card debt reached a record $1.17 trillion, a significant increase from $770 billion in early 2021. This surge [...]
Published On: February 17, 2025
Reprint from the IRS website: Presidents Day weekend is peak time for IRS phone traffic. Skip the wait by visiting IRS.gov. IR-2025-22, Feb. 12, 2025 WASHINGTON — With the 2025 filing season underway and the [...]
Published On: February 11, 2025
Some time ago I published an article about the Arizona Supreme Court's terrible decision that those who live in RVs, motor homes, trailers, or houseboats—basically anything that is not a traditional stick or manufactured home—can [...]