The American Rescue Plan, which passed back in March, did not include a provision that would prevent private debt collectors from garnishing the stimulus checks. There were some attempts by lawmakers to close that loophole, during and after the legislative process, but it remained in place. The CARES Act, passed in 2020, did include such a provision to prevent garnishment of the checks.

A new piece in Law 360 criticizes the law for leaving that open, with the headline “Congress' Inaction Keeps Poor From Getting Stimulus Money.”

Francine Lipman, professor at the University of Nevada, Las Vegas, William S. Boyd School of Law, assailed the provision in the Law360 piece.

"I guess the takeaway is that we can't try to fix everything through the tax system," she said. ”While some creditors got payments that they might not otherwise have gotten … at least that did reduce some of the debt that these households had.”

"We think it's a good idea to protect people's payments from debt collectors, but we were, in the end, not able to get it," Sen. Chris Van Hollen, D-Md. a co-sponsor of the legislation to prevent garnishment, told Law360. "Ultimately, we have not given up. We're keeping the idea alive, maybe [it can move] on some of these upcoming bills.”

The checks from the American Rescue Plan cannot be garnished for such debts as unpaid federal debts or back taxes, but they can be garnished for other debts, including medical bills, credit card debts, and other debts, providing that is ordered by a court.

“According to the text of the bill, payments will not be subject to reduction or offset for past-due federal or state debts, or by other assessed federal taxes that would otherwise be subject to collection,” CNET said after the bill was passed. “However, if you end up having any money missing from your third check and have to claim it on your tax return next year, that money could be subject to garnishment.”

There's a separate debate over whether the stimulus checks can be garnished from prisoners, and other convicted criminals. Following pushes by some local prosecutors to seize stimulus checks from prisoners, the Biden Administration issued a guidance earlier this month stating the checks can be taken from those who owe restitution.

“To the extent permitted by applicable state and local law, amounts paid in the third round of [economic impact payments] may be subject to garnishment by state governments, local governments, or private creditors, as well as pursuant to a court order (which may include fines related to a crime, administrative court fees, restitution, and other court-ordered debts),” the Treasury Department said in a letter to two Senators, who had sought clarification.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.