Don’t Let Your COVID-19 Relief Get Garnished

Under the CARES Act, most Americans are receiving economic impact payments. According to data from the Internal Revenue Service (IRS), the maximum payout is $1,200 per individual taxpayer or $2,400 for married couples filing jointly, with additional amounts for each dependent child.

If you owe money to creditors, you may be worried that your stimulus payment could be garnished and you’re right to worry.

Although your stimulus payment cannot be garnished from the Internal Revenue Service (IRS) to pay back taxes, there is no explicit prohibition in the law applying to garnishment from private creditors.

However, the CARES Act was intended to provide relief for Americans impacted by the COVID-19 crisis. So, it certainly does seem inconsistent with the purpose of the law for the money to be snatched up by judgment creditors. Some legal experts have argued that it may be a violation of debt collection laws to garnish these funds. It remains to be seen how a court will address this issue.

Some states, such as Ohio and Massachusetts, have published guidance on this issue. The Ohio Attorney General release a statement on April 13, 2020 that payments under the CARES Act fall within an exemption from attachment, garnishment, or execution pursuant to Ohio Revised Code section 2329.66(A)(12)(d). The New York Attorney General issued official guidance on April 21, 2020, “to make clear that emergency stimulus payments authorized by the CARES Act are exempt from garnishment under New York law, any creditor or debt collector that garnishes such payments has violated New York and federal law, and [the New York attorney general’s] office will aggressively prosecute such violations.”

So, if you haven’t received your economic impact payment yet and you’re concerned about being garnished, you should request your payment via check. Cash the check and never deposit the funds into your bank account. If your direct deposit information is on file with the IRS and you haven’t yet received your payment, you need to act fast and ask for a check. Visit the website, https://www.irs.gov/coronavirus/get-my-payment, for more information.

Manta Law Defends Consumers from Garnishment

Manta Law, a Tampa Bay boutique firm, represents individuals whose bank accounts or wages have been garnished. Call us for a free consultation to see if we can help you. We serve Tampa, Oldsmar, Carrollwood, Temple Terrace, Wesley Chapel, Seminole Heights, Town and Country, St. Petersburg, Largo, and Palm Harbor.