Greg's Corner

Are debt collectors coming for your stimulus check?

Debt is a delicate topic to discuss. There are those who think that anyone who is in debt must have lived outside their means and wasted all their money on frivolities. While cases like that certainly exist, the truth is that most people who are in debt are that way because of an unforeseen incident that happened in their life. Much of consumer debt comes from medical issues that even with health insurance still incurs a great deal of debt. The point that we’re making is that not everyone who is in debt is some deadbeat who refuses to pay their bills and spends their money on the latest model of an expensive TV. Having said that, to those people who are in debt through no fault if their own, debt collectors may be coming for your economic impact payment or as it’s more colloquially known your stimulus check.

The stimulus checks were intended for people to be able to pay for food, rent, and utilities during this uncertain time. However, there are few protections in place preventing debt collectors from coming after your stimulus check when you need it most. While some states and larger municipalities have passed legislation to protect consumers the majority of stimulus recipients have no such protections. It could be especially problematic for those who have had garnishments levied against them. In many garnishment cases, the debt collectors have an agreement with your bank and are monitoring any payments that come into your account. In this case, your stimulus payment could be intercepted and be taken as garnishment.

[youtube https://www.youtube.com/watch?v=_DiPIEPP7IU%5D

So what can someone do if they need that stimulus payment just to keep a roof over their head or food on the table? One thing you can do is to go to the IRS portal
and change your form of payment from direct deposit to a physical check. This way you can get the check cashed without having the debt collectors knowing that you’ve received your stimulus payment.

While you should pay off your debts in a reasonable matter, most people should never have to go hungry or homeless because of them.

(H/T Market Watch)