In response to Covid-19, Congress has enacted several pieces of legislation that is designed to help those who have been financially affected by the global pandemic. Depending on your income level, you may be eligible to receive payments in the form of a stimulus check. Many people who believe that they are entitled to a stimulus check have wondered whether a creditor can legally take their check in order to satisfy a debt. Here’s more on how to protect your stimulus payment and what rights you have against creditors that attempt to take your money.

Most Creditors Cannot Take Your Stimulus Check

Thanks to the CARES Act, the federal government (IRS) issued stimulus checks to eligible Americans. Congress did not specifically disallow stimulus payments from being seized by creditors, but it is worth noting that creditors cannot simply take it from you without giving you an opportunity to dispute the seizure.

Generally, creditors must first have a valid lien on your bank account in order to take the money inside of it. What this means is that if your stimulus check has been deposited into your bank account, then your creditors must first obtain a lien. This process takes time, and you typically have the right to respond before any action is taken. Still, if a creditor possesses a valid lien and wishes to garnish your bank account, then they must give you notice and an opportunity to dispute the garnishment.

It is important to note that some creditors have the ability to take your stimulus check. Specifically, if you owe back child support, or you owe money to the IRS, then your check may be automatically intercepted before it reaches your bank account. Again, as with any seizure, you should be provided with notice of someone’s intent to seize your check and you should be given an opportunity to dispute it in court.

Bankruptcy And Your Stimulus Check

If you are considering filing for bankruptcy, then it may be wise to hold off on filing until after you receive your stimulus check. Any money that you receive after you have filed for bankruptcy may be counted as property for the purposes of your bankruptcy case unless an exemption applies. If no exemption applies, your stimulus check may be taken in order to satisfy your outstanding creditors. It is important that you contact a bankruptcy attorney to learn more about how filing for bankruptcy may affect your ability to receive your stimulus check.

Florida Bankruptcy Attorneys At Your Service

Your stimulus check can be a lifeline during these unprecedented times. Many Americans are counting on this money to feed, clothe, and house their families. Creditors who are threatening to take your stimulus check may be violating state or federal laws. One of the best ways to protect yourself is to consult with a bankruptcy attorney so that you can become fully aware of your rights.

If you are thinking of filing for bankruptcy, modifying your mortgage, or are facing overwhelming credit card or student loan debt, The Bankruptcy Team can help you. Our experienced attorneys will thoroughly review your situation and advise you on meaningful solutions. To consult with The Bankruptcy Team, PLLC, call or contact us today.