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Bankruptcy Update-Are Stimulus Checks Exempt in Idaho?

Idaho Bankruptcy Update, COVID-19 and Stimulus Checks

April 6, 2020

On March 27th, 2020, Congress passed, and President Trump signed the CARES act into law.
Part of that trillion-dollar stimulus package includes direct stimulus payments to households in
America. Households can receive up to $1,200.00 per adult and $500.00 per child.

Are these stimulus checks exempt in a Bankruptcy? The short answer is very likely yes. In
Idaho, exemptions (an exemption is a protection from a creditor and trustee) are based on state
and not federal law. Although it has not been tested in court yet, it is likely that the stimulus
checks are exempt, meaning recipients will be able to keep their stimulus checks safe from
creditors or a bankruptcy trustee.

Under Idaho law certain government aid is exempt. Idaho Code Section 11-604 states:

11-603. PROPERTY EXEMPT WITHOUT LIMITATION. An individual is entitled to
exemption of the following property:

(1) A burial plot for the individual and his family;
(2) Health aids reasonably necessary to enable the individual or a dependent to work or
to sustain health;
(3) Benefits the individual is entitled to receive under federal social security, or
veteran’s benefits, except the restrictions under this subsection shall not apply to
enforcement of an order for the support of any person by execution, garnishment,
or wage withholding under chapter 12, title 7, Idaho Code;
(4) Benefits the individual is entitled to receive under federal, state, or local public
assistance legislation;
(5) Benefits payable for medical, surgical, or hospital care and the amount in a medical
savings account as that term is defined in section 63-3022K, Idaho Code;
(6) State unemployment compensation to the extent provided for in section 72-1375,
Idaho Code.

Pursuant to subsections 3 and 4 of this law, it is likely that the stimulus checks will be exempt,
and you will keep the stimulus checks even after filing a bankruptcy.

Foley Freeman is committed to continuing to provide our clients with bankruptcy advice during
the current Covid-19 pandemic

As a result of the current coronavirus pandemic, Foley Freeman has transitioned for the time
being to a largely remote work environment. Working remotely, we have the knowledge,
experience, and resources to help you with your bankruptcy, reorganization, and debt settlement
needs. Via telephone, video conferencing, and email, Foley Freeman can craft quality bankruptcy
and reorganization documents for your review and approval—be it a “fresh start” chapter 7
bankruptcy or a complicated chapter 11 reorganization. Once the documentation is finalized, we
have established procedures to safely enable clients to visit our office and have those documents
signed—all while complying with the current Covid-19 social distancing rules and guidelines.

Tough times are ahead for Idahoans and Foley Freeman is here to help. If you and your family
are in financial distress, please contact us to make an appointment to discuss all your options
including reorganizations, liquidations, workouts and all chapters of the bankruptcy code.

Please call 208-888-9111 for a free consultation during the coronavirus pandemic.