https://www.usatoday.com/story/news/politics/2021/03/10/private-debt-collectors-can-seize-1-400-stimulus-checks/6938635002/
Private debt collectors can seize $1,400 coronavirus relief checks to pay creditors
Michael Collins | USA TODAY
WASHINGTON – A warning for Americans who will receive $1,400 stimulus checks under the third round of direct COVID-relief payments: If you have unpaid debts, creditors may come after your money.
Debt collectors will be able to garnish the stimulus funding that will be distributed to millions of Americans under the $1.9 trillion American Rescue Plan that the House gave final approval on Wednesday. President Joe Biden will sign the legislation into law on Friday.
The second round of stimulus payments distributed in December barred creditors from garnishing the money. But the Senate was unable to include such protection in the latest bill because of the budgetary rules under which the relief package was approved.
The first round of stimulus checks, which totaled up to $1,200 and were distributed last spring under the CARES Act, did not prohibit garnishment by creditors. But some states and local governments enacted protections to keep debt collectors from getting their hands on the money.
Congress made the stimulus payments off-limits to private creditors when it approved the second round of $600 checks in December.
But it was unable to extend those protections this round because the Senate passed the COVID-relief package through a procedure known as reconciliation, which limits provisions in the legislation to those that are tied directly to the budget.
The legislation does protect against seizure of the stimulus money to pay back taxes, child support and other government debts.
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