Garnishment Order and Your Stimulus Check

Many Americans are awaiting the deposit of their stimulus checks there are issued according to the CARES Act as a result of the economic devastation created by the pandemic, stay at home orders, and business closings.  According to news reports, these checks are paying people to stay at home.  Checks are also being sent out to those for which the government does not have account information.

Hopefully, I am telling you something you already know.  But guess who else knows this money will hit your account.  That is correct:  Creditors and Debt Collectors.  Hence, expect an increase in collection activity, and if your account is subject to a garnishment order, those trying to collect a debt may seek court order intervention to go after the funds.

If you are in a bankruptcy proceeding, chances are your account is safe from garnishment.  You should check with your bankruptcy attorney to insure there the account is protected under the bankruptcy code by something called an automatic stay.  If you don't know what an automatic stay is, you should ask your attorney.

If you are not in bankruptcy, you should contact a local attorney practicing in your state to find out how you can protect the funds.  In some states, your financial account may to subject to a continuing writ of garnishment, whereby there may be a freeze put on the funds until there is judicial intervention.  And trying to get before the Court could be a challenge in and of itself, and in many areas of the county, the judicial system, to some extent, is shut down.  You should also check to see if there is a order put in place within your jurisdiction temporarily putting a hold on garnishments because of the national emergency.

So, what happens if your account has been garnished?  That again depends on the state.  Different states have different exemptions.  So again, you should check with an attorney.  Some states have wild card exemptions, or exemptions related to a percentage of Federal funds received.  So the stimulus check may fall within this exemption amount.  Another possibility is to see if your state has an exemption for public assistance.

If you are the subject of a garnishment, whatever you do, do not delay in getting with an attorney as soon as you can, as any delay may negatively effect your rights to recovery of the funds.