Debt Collectors Can’t Garnish Your Stimulus Check if You Live Here

Debt Collectors Can’t Garnish Your Stimulus Check if You Live Here

New York Gov. Andrew Cuomo (D) signed legislation on Thursday that blocks debt collectors from garnishing residents’ coronavirus stimulus payments.

New York Gov. Andrew Cuomo (D) signed legislation on Thursday that blocks debt collectors from garnishing residents’ coronavirus stimulus payments.

Any federal payment, including direct checks, tax refunds, rebates and tax credits are now protected.

“New Yorkers in every corner of the State felt the effects of the COVID pandemic, many losing jobs due to no fault of their own and struggling to support themselves and their families,” Cuomo said in a statement. “This critical legislation will help ensure relief payments made to New Yorkers are protected from unscrupulous debt collectors so that the money can be used as it was intended—to help make individuals and families whole as they continue to recover from the economic impacts of the pandemic.”

New Yorkers who are subject to a monetary judgment against their bank account will receive a notice indicating that the pandemic-related funds are protected. And if their funds have been inadvertently frozen by a debt collector, they can complete a form to get the funds released.

“Federal relief payments were intended as a lifeline to help families and individuals that are struggling to make ends meet during these exceptionally challenging times. I thank Governor Cuomo for signing this critical legislation to protect this safety-net funding from being seized by unscrupulous debt collectors, ensuring that New Yorkers can use these funds as they were originally intended—to provide relief and help families recover from the impacts of the pandemic,” state Sen. Kevin Thomas (D-N.Y.) said in a statement. 

Cuomo’s office noted that any resident who has had their direct payment taken by a debt collector after May 13 should file a complaint with the New York Department of Financial Services.

The Internal Revenue Service is still distributing the most recent round of direct relief, as the agency just sent out its ninth batch that contained more than one million payments. The IRS has sent out roughly 92 percent of the federal funds set aside for the stimulus aid and will continue to pump money out until the relief dries up.

Eligible Americans have received three direct payments since the onset of the pandemic—$1,200 in March 2020, $600 in December 2020 and $1,400 from President Joe Biden’s rescue package.

Those who qualify for the most recent round of relief include single filers earning up to $75,000, and joint filers making up to $150,000. Individual filers earning up to $80,000 and joint filers making up to $160,000 will receive smaller amounts than the $1,400.

Taxpayers who were alive as of Jan. 1, 2021 also qualify to receive a payment.

The president’s relief bill also widened the eligibility pool for dependents, allowing dependents over the age of sixteen to qualify. Those under the age of nineteen, under the age of twenty-four and are students, or any age and are permanently and totally disabled qualify as a child for the additional tax relief. The change in eligibility made 13.5 million more people able to receive the stimulus checks. 

Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.