On March 17, 2021 the National Association of Consumer Bankruptcy Attorneys (NACBA) submitted a letter to Director Clifford White at the Department of Justice Executive Office of the US Trustee (EOUST). NACBA called on Director White to use authority to ensure that the goals of the American Rescue Plan Act 2021 are not undermined by the office or by bankruptcy trustees.
Director White responded to NACBA’s letter on March 25, 2021 with a “Notice to Chapter 7 and 13 Trustees Regarding Treatment of Recovery Rebates and Tax Credits for Consumer Bankruptcy Debtors Under the American Rescue Plan Act of 2021”. In summary, EOUST advises Chapter 7 and 13 trustees should not consider recovery rebates or child tax credits in administering estate assets or calculating disposable income in chapter 13 repayment plans. Trustees who believe that the specific facts in a case may require a different result are directed to contact the United States Trustee prior to taking any action to administer recovery rebates or to object to a chapter 13 plan based on the treatment of recovery rebates or the additional tax credit under the ARP.