This week millions of Americans are checking their bank accounts and mailboxes to see if they have received their COVID-19 stimulus checks or direct deposits. The $2 trillion coronavirus rescue package was created to help Americans stay afloat during the pandemic and help the economy. However, in some cases, your debt collectors may be able to take your check.
CARES Act Provisions - Stimulus Checks
As of now, Congress has not made stimulus payments from the CARES Act exempt from private debt collection. This means that your stimulus check can be used to pay off creditors, leaving you with nothing. Right now, your bank would be the first to take payments from your stimulus check to pay off loans or fees that are past due. In addition to private debt collection, your stimulus check may also be used to pay for child support if it is also past due. This is because these funds are defined as tax credits, not federal benefits which makes them subject to garnishment, meaning a debt collector who wins court judgment can take anything held of value. However, if you have a debt owed to federal or state agencies, your money is safe. Under the CARES Act, the stimulus payments must go to immediate economic needs, which does not include federally owed money.
What Can Be Done?
Right now, lawmakers are pushing The Treasury Department to extend the rules that protect Social Security payments from garnishment to cover stimulus payments. The National Consumer Law Center
suggests withdrawing it as cash, transferring it electronically, or promptly using it to pay for your needed essentials to avoid it being taken as debt collection.
Stimulus Checks: Economic Support For Those Who Need it Most.
Right now, you may be in the midst of bankruptcy and unemployment, trying to stretch your dollar to the farthest amount. Knowing that your stimulus check can be used to pay off debts instead of keeping you above water at this time can be even more stressful. You probably have questions on how to protect yourself and your family. The Jones Law Firm is here to help.
Call the Ohio Bankruptcy Attorneys Today.
Due to the outbreak of COVID-19, Jones Law is offering free initial consultations by telephone. If you are worried your stimulus check will be used to pay off debts, we encourage you to contact The Jones Law Firm
for a free consultation about how we can help you through this difficult time. With offices in Reynoldsburg, Ohio
, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio. Our attorney is available to work with you remotely to protect your financial and health interests.