Many Americans may never get their $1400 stimulus checks because the third round of COVID-19 stimulus doesn’t prevent debt collectors from taking them.
The first round of stimulus checks in the spring of 2020 didn’t get protected either, although some states did.
The second payment of $600 was 100% protected.
The $1,409 checks won’t be protected since budget reconciliation was used instead of a stand-alone bill. That allowed Senate Democrats to pass the bill with 51 votes, instead of 60.
Any creditor can seize the $1,400 payment. Lauren Sauders, associate director of the National Consumer Law Center reports that the two most likely debts to be collected are medical debt and credit card debt. In some cases, stimulus checks can be withheld for private student loan debt.
The IRS cannot seize your payments for back taxes or child support.
As chairman of the Senate Finance Committee, Oregon Sen. Ron Wyden announced, he intends to file legislation that provides the $1,400 stimulus payments as benefits exempt from federal garnishment. However, with checks going out now, it might be too late.
