Covid-19 and Bankruptcy

Questions have been arising regarding Covid 19 and Ch 7 bankruptcy.

(1) should be included in the calculation of current monthly income or
projected disposable income; and

(2) are property of the bankruptcy estate.

The United States Trustee’s office sent a notice on April 7, 2020.  Here’s a link.

The answer to question 1 is “no”.  So it won’t be counted on the means test.

Regarding question 2 the notice says:

The Act is silent as to whether the recovery rebate is property of the estate. In chapter 7
cases, the “property of the estate” issue will only arise in cases filed after March 27, 2020, the
effective date of the Act. Regardless of whether the rebate is property of the estate, the United
States Trustee expects that it is highly unlikely that the trustee would administer the payment
after consideration of all relevant circumstances, including: the modest amount of the recovery
rebate; the applicability of state and federal exemptions; any interest of a non-debtor spouse in
the recovery rebate; the cost to the estate of recovering and administering the recovery rebate,
including litigation with debtors who may seek a judicial determination; and the extent to which
recovering the recovery rebate will enable creditors to receive a meaningful distribution.

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