13 April 2020 – Filling the void of direct federal guidance on collections related issues during the COVID-19 crisis, Massachusetts State Attorney General Maura Healy has taken the lead in providing guidance in regards to halting the ability of collectors to seize the newly released Stimulus checks direct deposited into bank accounts by direct deposit that commenced on April 10.
In the AG’s view, “It is the Attorney General’s view that, under Massachusetts law, all funds provided to Massachusetts residents under Section 2201 of Title II of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, constitute “public assistance” under G.L. c. 235, § 34. Accordingly, the funds are exempt from seizure, including garnishment, under G. L. c. 235, § 34, and attachment under G. L. c. 223, § 42, and remain exempt after payment regardless of the manner in which the funds are deposited or thereafter held.”
In the absence of a functioning or attentive congress, who have extended their vacations until May 4, there has been no clear Federal guidance or regulations pertaining to the allowable extent that stimulus checks can be seized through wage garnishments or credit union rights of offset.
As Massachusetts, Texas and the District of Colombia have already enacted collection and repossession moratoriums for public relief, closely resembling elements of H.R. 6379. It is beginning to appear as though the individual states will be making the judgement calls in regards to all collections and repossession activities for the foreseeable future. It is highly probable that other states will very soon, or already have issued similar guidance yet to be reported.
Disclaimer: This information is provided for informational news purposes only. Please consult your collections attorney before making any consideration of offsetting funds via cross collateral authorization or attempting a wage garnishment.
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