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Debt collectors are taking $1,400 stimulus payments, Congress is trying to stop it

Federal lawmakers are working on changing a problem that started cropping up in recent stimulus check distributions.

The $1,400 checks that started going out last week were getting seized by private debt collectors. Lawmakers say that’s a problem- given that the checks are intended to keep families budgets ‘whole’ during a public health crisis.

It’s happening to customers who have an unpaid judgment against them over a debt. The bottom line is that if you’ve been taken to court over an unpaid debt- there’s at least a chance that stimulus money could be obtained to flush it out.

Sen. Ron Wyden, a Democrat from Oregon, plans to introduce a fix that would shield the payments from garnishment as early this week, according to CNN.


That said, the change will take time to make happen. And that could mean that stimulus payments that arrive in the coming days- or arrived over the weekend- could be seized under the existing rules.

Lawmakers shielded the last round of payments. However, they failed to get the same language into this bill. The original relief package, which passed last March and sent $1,200 out to people in the U.S. making less than $75,000 a year also did not have the language.

So it’s a problem that has been cropping up- over-and-over.

A coalition of advocacy groups, ranging from the National Consumer Law Center to the American Bankers Association, are urging lawmakers to make the fix, according to CNN reporting. “Otherwise, the families that most need this money — those struggling with debt and whose entire bank accounts may be frozen by garnishment orders — will be not be able to access their funds,” the letter read.

It’s unclear how soon this fix could get across the finish line.



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