What To Do If You're At Risk Of Getting Stimulus Check Garnished

(CBS DETROIT) – While consumer advocates praise lawmakers for passing the $1.9 trillion American Rescue Plan Act of 2021, they're also raising eyebrows at loopholes that could snatch payments from qualifying families.

"We were not able to get the protection into the bill, but we truly hope that debt collectors will not take advantage of it," said National Consumer Law Center Associate Director Lauren Saunders.

Part of the ARP kicks out $1,400 payments for individuals and dependents, plus $2,800 for married couples. But that extra cash could be already called for.

"The way garnishment works is a garnishment order is served on the bank. The bank then has to freeze the account immediately not to access your money to buy food or anything else. The bank then gives you notice and says, 'Hey, you've been garnished,' and they give you a short time to go to court to lift the garnishment order. If you don't do that, then they're gonna pay the money over to the creditor," said Saunders.

If you have a pending judgment for garnishment, the National Consumer Law Center suggests contacting the court handling your case to determine if there are any options available to protect your money.

Since the bill was passed through a process known budget reconciliation, payments are open to debt collectors.

"The best thing you can do is watch your bank account like a hawk and take that money out as soon as it comes in," said Saunders.

Although stimulus payments are not protected from private collectors, tax debt and government collections like child-support are safe from garnishment.

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