Not two weeks have passed since Congressional leaders came to an agreement with the White House on a two-part stimulus package designed first to put money into the hands of consumers that they, in turn, will spend, thus boosting our economy, and then to stimulate growth of small businesses through tax reductions. On January 24th, there was an official news conference announcing the $150,000,000,000 package. While the Senate had not yet approved the plan, the expectation was that checks could be on their way to consumers as early as this June.
So, how much money are we talking about? The stimulus plan calls for most tax filers refunds of between $600 and $1,200, and even more if they have children, $300 more per child, to be exact. Individuals earning more than $75,000 annually would get smaller rebate checks, while those earning above $87,000 would receive nothing. In all, those individual rebates account for roughly $100 billion of the plan, with the remaining $50 billion taking the form of tax cuts for businesses.
A third element of the stimulus package raises the limits on FHA mortgage loans, and increases the size of the loans that federal agencies Fannie Mae and Freddie Mac can purchase.
As a bankruptcy attorney in Indiana who deals with people in financial distress, hearing dozens of stories about financial struggles each week, I am unfailingly interested in any attempt to help people survive financially. And, while I doubt the amount of money this package would provide is enough to help all the debtors get caught up on their bills, nonetheless it’s a move in the right direction and may buy a little bit of time for some individuals to plan the best strategy for handling their debt.
My biggest concern is whether or not my bankruptcy clients who have filed or soon will be filing for bankruptcy proceedings will be allowed to keep this newfound money, or whether the bankruptcy court will seize the funds to help pay the clients’ past bills! I guess we’ll all have to wait for the mail – won’t we?