Attorney General Working to Protect Stimulus Checks From Debt Collectors

HYANNIS – Attorney General Maura Healey has issued a guidance to protect consumers who will receive a coronavirus stimulus payment from debt collectors.

She’s also calling on the Trump Administration to take immediate action to ensure the payments go to American families and not debt collectors.

According to the guidance, Healey’s office has determined that emergency funds that will be issued to consumers starting this week through the CARES Act are exempt from seizure or garnishment by creditors under Massachusetts law.

Healey’s also signed onto a multi-state letter to the U.S. Department of the Treasury asking the agency to protect CARES Act payments like other government relief programs and ensure the funds go to individuals and families.

“These payments are supposed to help individuals and families put food on the table during this crisis, not enrich debt collectors,” Healey said.

“With this guidance and letter, my office is putting the debt collection industry on notice that these payments are off limits.”

The CARES Act was signed into law last month and provides emergency assistance for individuals, families, and businesses affected by the coronavirus pandemic.

Under the Act, eligible individuals and families can receive cash assistance including a one-time cash payment in the form of a refundable tax credit of up to $1,200 for each individual or $2,400 for eligible individuals filing a joint tax return, plus an additional $500 for each dependent child.

Lesser or no amounts will be paid to individuals with higher incomes as measured by the taxpayer’s adjusted gross income.

Massachusetts law exempts certain income and property from debt collection by creditors.

The purpose of the exemption law is to ensure individuals have enough income and property to provide for basic necessities like housing, food, and utilities.

According to Healey’s guidance, any attempt or threat by a creditor or a debt collector to garnish or seize funds provided through the CARES Act violates the Attorney General’s Debt Collection Regulations and the Attorney General’s Emergency Debt Collection Regulations announced last month, which prohibit new garnishments during an emergency period. 

The attorney general’s guidance, however, does not apply to any actions taken by the Massachusetts Department of Revenue, including any actions taken to collect past due child support.

Visit the AG’s website for more information about the guidance.