JACKSONVILLE, Fla. – A third round of stimulus checks are on the way, but did you know the $1,400 checks can be garnished to pay off debts?
Unlike the first two stimulus bills, which offered protection from debt collectors, the third one does not. The change is because the relief package was passed via budget reconciliation. It allowed Democrats to avoid a possible filibuster from Republicans, but it also opened the door for collectors.
“Those private businesses that you may owe money to have the ability to garnish that amount when it hits your bank account,” explained Mike Ellis, a financial advisor.
To be clear, stimulus check garnishments only apply to people whose debts have gone into collections. And those collections only pertain to private businesses or credit card companies.
Ellis says if you have accounts that are in collections, the best thing to do right now is call the collections agency in advance.
“Let them know: I’m in a need here. Please work with me so you don’t garnish what’s been deposited into my account,” Ellis explained.
The financial advisor brought up three of the most common questions he gets when it comes to the stimulus.