CARES ACT AND BANKRUPTCY            What follows is 

a basic explanation of the CARES Act and the relief payments made to individuals and married couples. A number of situations are briefly explored to provide a better understanding of how you may be affected. Please be advised that you should always consult with an attorney before taking steps that may negatively impact you and

 your family.


Questions about 

the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020.  The law made more than two trillion dollars in economic relief available for the American peo

ple to protect against the health and economic impacts of Covid-19. Click on the following link for more detailed information from the website of U.S Treasury


Stimulus Checks


The economic impact payment issued under the CARES Act commonly known as the covid-stimulus check consists of a one-time payment up to $1,200 for qualified individual taxpayers and up to $2,400 for qualified married couples who have filed their taxes jointly. Qualifying families are may also be eligible for up to $500 per dependent chi ld.  The CARES Act

does not specifically deny garnishment of stimulus money by creditors and debt-collectors.



On April 13, 2020, Ohio Attorney General Yost posted notification on his website and reached out to financial institutions and creditors, informing them that covid-19 stimulus checks are protected under Ohio Law. According to the notification,0.R.C. §2329.66(A)(12)(d) applies to payments under the CARES Act, as a payments received as compensation for lost future earnings. Attorney General Yost argues therefore that these payments are protected from creditors, and are exempt from state and federal garnishment, execution, and attachment.




Many covid-19 stimulus payments have been electronically deposited into the bank accounts that tax-payers have directed the IRS to electronically transfer their tax-refunds.  Although protected in Ohio, there have been instances where bankers in Ohio have used the payments to off-set customer’s overdrawn accounts.  If you have not yet received your payment and have an overdrawn account, you can protect yourself by requesting a paper check.


Child Support


The CARES Act specifically states that stimulus checks can be intercepted and applied to child support arrearages.  If this happens, you should receive an off-set notice from the federal government that your economic impact payment has been applied to your child support debt.


Divorced Couples


Stimulus checks were issued based on information contained in your 2018 and/or 2019 tax returns.  If your check was issued based on information from a jointly filed 2018 and/or 2019 tax return, and you are now divorced or separated you must make sure that your ex-spouse receives their portion of the payment.   If you are divorced and have children you must make sure that the correct spouse receives the correct amount of the child payout.  In both situations you should consult your attorney to ensure proper distribution of the stimulus check.


Deceased Persons and Probate Estates

Due to confusion about who should receive a stimulus check, more than a billion dollars was distributed to deceased persons and/or their estates.  In May of 2020, the IRS decided that these payments should be returned and provided instructions on how to correctly do so.  Click on the following link to learn how to return a stimulus check made to a deceased person,