Debt collectors are eager to take your Coronavirus stimulus payment. In many cases they will seek to garnish the stimulus money right from your bank account. Congress has not entered any legislation to protect these payments from seizures by debt collectors but there are still a few ways to protect your Covid-19 stimulus payment.

Get a paper check of your Coronavirus stimulus payment instead of using direct deposit

Have the IRS send your stimulus payment, or any other tax refund for that matter, by sending a traditional paper check by mail. That will substantially delay the payment however, so be careful. If you need the money now and it is going to be automatically garnished, get an attorney to file an emergency protective order to protect the stimulus payment from garnishment. When the payment arrives, cash it or take it out of your account as quickly as possible. That would prevent most debt collectors from taking the money in most cases. Use it for the food, medical care, clothing, housing, and other necessities for  which the Covid-19 tax refunds were intended. Even if your bank account is already frozen or being garnished, simply cashing the check will not allow the collection agency to take it. You can check the status of your Covid-19 stimulus payment with the IRS online.

Negotiate with the debt collection agency

Most collection agencies will take your money without any second thoughts. During this Covid-19 panic however, many are likely to be sympathetic to your need for the Coronavirus stimulus payment to go toward food, clothing, rent, mortgage payments, medical care, or other necessities. It can’t hurt to at least try to negotiate time to repay the debt when the crisis ends to to even request a goodwill return of the money if it was already seized.

Its true that most debt collectors, collection agencies, and collection attorneys have hearts of stone and care far more about money than they do about people but some may still do the right thing during this pandemic. If they won’t move on to the options below.      

Object to any seizure of your stimulus check

If you have a garnishment order in place you should immediately file an objection to any seizure of your stimulus check. You may also be able to file for an emergency injunction to prevent the seizure of your Covid-19 stimulus payment. Even if you are trying to negotiate with the collection agency, you must still file an objection or request an injunction.

Coronavirus stimulus payments are supposed to help people pay for necessities such as food, rent, mortgage payments, clothing, and medical care. The Covid-19 payments are not intended to use to pay for past debts. You should therefore object if the money is garnished by a collection agency.

There are likely to be some state protections or exemptions to seizure of stimulus payments issued for national emergencies so check your states laws for other possible ways to argue your payment is exempt from seizure.

Stop collection harassment

Many times the right letter can stop collection harassment. Some debt collectors may also stop garnishments or seizures of your Coronavirus stimulus payment if you send the right letter. Debt validation letters, debt verification letters, and other dispute letters can help stop the seizures. These usually work best before a garnishment is in place but may still be effective if the bank is garnishing your Covid-19 stimulus payment. If you have income that is already exempt from seizure or garnishment such as Social Security disability or other similar exempt income, a properly written exemption notice letter may also get collection agencies to stop a bank garnishment. 

Sue the debt collector

Under the Fair Debt Collection Practices Act (FDCPA) you have a right to sue any debt collector, collection agency, or collection attorney that violates your rights. Although this issue is far from clear, the courts should consider any seizure of stimulus payments to be deceptive, unfair, unconscionable, or abusive. The Covid-19 stimulus checks are meant to help American’s survive not line the already bloated pockets of collection agencies. The money should therefore be immune from seizure.   

Use caution however. Don’t go this route alone. Hire an experienced Fair Debt Collection Practices Act litigation attorney. There is no clear ruling from the courts yet that seizing a Coronavirus stimulus payment violates the FDCPA so you want experienced assistance in making these arguments. 

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If your Coronavirus stimulus payment was already garnished, seized, or frozen by a debt collector, collection agency, or debt collection attorney let us know immediately. We can help stop a garnishment, file an injunction, negotiate with your creditors, or take other action to protect your Covid-19 stimulus payment check.