Can a debt collector get to your coronavirus stimulus money before you? Possibly
The coronavirus stimulus checks that began hitting bank accounts Wednesday remain within the reach of debt collectors, despite two U.S. senators’ bipartisan request letter to U.S. Treasury Secretary Steve Mnuchin.
If you owe back taxes, neither the IRS nor your state government can touch the money. But as the National Consumer Law Center pointed out earlier this month, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) “does not specifically address garnishment or bank offsets for other debts.”
The law center opined that the Treasury Department should code the CARES Act payments as it does other protected-from-garnishment federal payments, such as Social Security checks. In an April 9 letter, Sens. Sherrod Brown, D-Ohio, and Josh Hawley, R-Missouri, asked the same thing of Mnuchin:
“Treasury has the authority—and must exercise it—to also protect CARES Act direct payments from being seized to satisfy garnishment orders for private debts (except for child support payments).
“If Treasury fails to take action, the CARES Act direct payments are at risk of being seized by debt collectors. That is not what Congress intended. We came together to pass the CARES Act to help American families pay for food, medicine, and other basic necessities during this crisis.”
As of Wednesday afternoon, Brown’s office had heard no formal response from the Treasury Department.
