States prevent money from being decorated

New $ 1,400 stimulus checks are aimed at helping millions of Americans overcome the financial problems of the Covid-19 pandemic.

However, the legislation approving these payments has one major caveat: the funds can be decorated for arrears of unpaid debt.

This applies to private debt, such as medical bills or credit card debt, which is subject to a court order.

The U.S. Rescue Plan Act, which was passed through a process called budget reconciliation, did not protect the stimulus controls from the decoration.

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Democratic senators Sherrod Brown of Ohio, Ron Wyden of Oregon, Bob Menendez of New Jersey and Chris Van Hollen of Maryland put forward a proposal to protect the stimulus payments of private debt collectors.

But efforts to advance the bill were thwarted by Senate Republicans last month.

“Sen. Brown will continue to look for ways to ensure that federal payments go to U.S. families and not to debt collectors,” the legislature’s office said.

In the meantime, some states have stepped up to protect the payments. The efforts are similar to those made last year, when the first $ 1,200 stimulus checks were also subject to decoration. (The $ 600 stimulus checks approved by Congress in December were generally released.)

Here is a to-do list of states that have taken action to date.

Previous stimulus tests have been protected by the Colorado legislature against the decoration.

However, this does not apply to the new $ 1,400 stimulus checks.

“We are currently working on a new bill to increase the general protection for garnishes that will help protect new stimulus controls,” said Lawrence Pacheco, director of communications at the Colorado Attorney General.

Massachusetts Attorney General Maura Healey issued guidelines in March exempting the $ 1400 stimulus checks from the decoration or seizure under state law.

“These stimulus payments should directly help people and families in difficulty pay for housing, food, utilities and other basic needs, and not into the hands of debt collectors,” Healey said in a statement.

However, the guidance does not apply to actions by the Massachusetts Department of Revenue, including those related to child support that were previously payable.

In January, Minnesota Gov. Tim Walz, a Democrat, amended and expanded an executive order classifying the money as ‘need-based government assistance,’ which still applies.

According to the Minnesota Attorney General’s Office, the stimulus funds were released from collection at least six months after they were received.

Nebraska Attorney General Doug Peterson issued an announcement in March explaining that the $ 1,400 stimulus checks could be exempted from decoration, seizure or execution for some low-income individuals.

“The law in Nebraska exempts certain income and property from execution and seizure by creditors and debt collectors,” the announcement reads. “The purpose of these exemptions is to ensure that individuals have enough income and property to provide for basic necessities such as housing, food and electricity.”

New Jersey government Democrat Phil Murphy announced in March that certain financial institutions in the state had agreed to protect the $ 1,400 checks against deprivation.

“We want residents who have received their federal incentive funds to use it as they see fit,” Murphy said in a statement. “I’m glad 50 banks and credit unions have signed our agreement to protect these federal payments received by New Jerseyans from being backed up for past debt or overdraft.”

The protection lasts for at least 30 days once the money has been deposited in the consumer’s account.

New York Attorney General Letitia James issued guidelines in March to prevent debt collectors from seizing the $ 1,400 payments.

“This official guideline makes it clear that banks and debt collectors cannot freeze or use stimulus funds intended for New Yorkers, especially not those who need them most at this time,” James said in a statement. “My office remains committed to protecting the rights of New Yorkers and ensuring that any institution that violates this guidance will be held accountable to the full extent of the law.”

In addition to decoration, the guidelines also apply to set-offs, whereby money is used in accounts to pay debts to banks.

However, the guidance does not apply to actions taken by the State of New York, such as efforts to collect child support paid for in the past.

According to an Oregon Attorney General’s spokeswoman, Ellen Rosenblum, Oregon continues to protect stimulus tests against the decoration after the Oregon legislature passed a law in an emergency session.

The spokesman also said the Oregon Child Support Program will not adorn stimulus checks from financial institutions.

Rhode Island Attorney General Peter F. Neronha recently issued guidelines indicating that the $ 1,400 stimulus checks are protected from seizure or seizure by debt collectors.

“These payments are a lifeline for so many Rhode Island families devastated by the pandemic,” Neronha said in a statement. “They belong to the recipients and are not an honest game for debt collectors.”

In addition, the Attorney General’s Office will act to enforce the law if a creditor attempts to seize a stimulus payment.

Virginia Attorney General Mark R. Herring last week announced an amendment to a law to protect the $ 1,400 stimulus checks against debt collectors.

The law was initially passed last year to protect the payments of the $ 1,200 CARES Act from garnishment.

The amendment “ensures that Virginians are able to maintain total federal stimulus payments and thus protect the money from debt collectors and creditors,” according to the announcement.

In March, Washington Democrat Jay Inslee, a Democrat, updated a proclamation on decorating consumer debt with new language to include “federal payments of any kind issued in response to the Covid-19 pandemic.” , which applies to the $ 1,400 incentive payments.

“Your stimulus check will help pay for necessities, such as food and rent,” Washington Attorney General Bob Ferguson said in a statement. ‘It should not be decorated to pay medical bills.

“If your debt collectors are going after your stimulus payment, contact my office.”

This article may be updated as new information develops. Check back for updates.

Having trouble getting your $ 1400 incentive test due to unpaid debt and are you willing to share your story? Email [email protected].