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Can debt collectors garnish stimulus payments?

With the passage and enactment of the latest stimulus package, part of the overall American Rescue Plan, U.S. citizens around the country celebrated the much-needed financial help that the bill provides. Legislators kept their promise to add $1,400 to the previous $600 checks and deposits was welcome news.

However, they were not the only ones heralding the influx of money into bank accounts nationwide. Debt collectors were at the ready to pounce, taking away the financial lifeline to pay the delinquent debts of consumers, promise or no promise.

Protection of stimulus payments from collectors was in the previously passed bill towards the end of the prior presidential administration. The current bill lacked that language.

Taking action to protect those struggling financially

In response, four Democratic U.S. Senators introduced an amendment that would preserve COVID relief payments from garnishment efforts by predatory private debt collection companies. They cited the unique circumstances resulting from the continued and unprecedented financial problems created by the pandemic. They see it as akin to taking away their chance to pay rent and buy groceries.

In Maryland, Governor Hogan signed an Order on March 15, 2021 that exempts American Rescue Plan funds from garnishment except for cases involving judgments for child support. This is a helpful step to allow consumers to use the funds for necessary items.

If you believe you have been garnished improperly for any reason, please contact us.