Unpaid Debts Could be Taken Out of COVID Relief Payments
Do you have any unpaid debts? If so, they could take a bite out of your $1400 stimulus relief payment.
According to this Fox Business article, debt collectors will be able to garnish money from stimulus checks being sent to people who owe money.
You may be asking why money for unpaid debts can be seized from this stimulus as opposed to the other two relief payments. It's because, unlike the first two rounds of money, this bill - the $1.9 Trillion American Rescue Plan - was passed through budget reconciliation. This allowed the Democrat-sponsored bill to pass with zero support from Republicans.
Standalone legislation would need to be passed to prevent creditors from taking hold of stimulus checks. And that's what the American Bankers Association and a coalition of groups are writing congressional leaders to do in a letter to them.
The economic impact payments are intended to help families purchase food and other necessities to make ends meet. Many people were already struggling prior to the coronavirus crisis and millions have now been laid off or had their hours cut.”
The chairman of the Senate Finance Committee - Sen. Ron Wyden (D-Oregon) - says he intends to do that by filing a separate bill. But, he wants Republican support on this one.
While Democrats intend to protect the third payment from private debt collectors, Senate rules did not allow us to include that protection in the American Rescue Plan," Wyden said in a statement. "I will be introducing standalone legislation to ensure families receive their much-needed relief payments."
As explained in the Fox Business article, It took many state and local governments to adopt protections to keep stimulus checks in the first round of payments from being seized by creditors. The second round of payments had a provision included by Congress that kept creditors from garnishing money.
$1400 checks/payments are being sent to individuals earning $75,000 or less, $2800 to couples earning $150,000 or less, and an additional $1,400 for each dependent child claimed on a family's most recent tax filing.
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