On , President Biden signed into law the American Cut Package Work (ARPA). This legislation has a number of provisions of importance to consumers and consumer attorneys. This article focuses on the Act’s implications for the practice of consumer law.

In place of brand new $600 repayments available with the fresh stimuli rules, there isn’t any safety within loans in Maryland the ARPA, in which a bank checking account contains ARPA stimulus costs, against judgment creditors garnishing the lending company membership otherwise banking companies light numbers regarding bank account to pay for pre-present costs towards lender

The American Rescue Plan Act (ARPA) provides for $1400 per individual in stimulus payments for the majority of Americans. Come across ARPA § 9601.

The December 27 legislation provided that stimulus payments (typically $600 per individual) under that legislation would not be reduced to offset federal debts or to pay state child support enforcement orders and cannot be garnished by judgment creditors. The December 27 payments were coded in a way that banks can recognize them and automatically protect them if they receive a bank account garnishment order. See Personal Laws No. 116-260, Consolidated Appropriations Act of 2021, div. N § 272.

Because ARPA was passed through budget reconciliation, ARPA does not contain these protections (other than protection against offset for child support), so that ARPA stimulus payments are vulnerable to garnishment in a way quite similar to the vulnerability of the typically $1200 stimulus payments pursuant to the , CARES Act. As such, reference should be made to an earlier article bringing information on preventing garnishment and set off of CARES Act payments. Nevertheless, many of the emergency state protections listed in that article have now expired.

A bill has been introduced to provide similar protections from garnishment for ARPA payments as the provided for in the , Societal Legislation No. 116-260. Be alert to new legislation that might offer these protections for ARPA payments.

An effective way to Include ARPA Stimulus Payments away from Garnishment

Delaware constraints checking account garnishments, and you may California, Massachusetts, and you can New york protect a particular dollars count during the a bank account once the instantly exempt regarding garnishment. In other claims, just after a bank checking account try frozen pursuant so you can good garnishment buy, an individual would have to increase applicable exemptions, often to own financing within the a bank checking account or a general “nuts card” exception. For more info, see:

Exemptions applicable to “public benefit payments” in at least some states have been treated as applicable to federal stimulus payments. In addition, some state emergency COVID-19 orders issued in the spring or summer of 2020 may still be in place, preventing bank account garnishment. A current tracker of these state actions is found here.

In the event the a consumer thinks that the client’s family savings will probably getting susceptible to a great garnishment buy to repay a court judgment, await in the event that stimuli percentage is myself placed on the family savings, and you may move the cash outside of the account when you can easily, like by paying out-of delinquent high priority expense (elizabeth.grams., rent, mortgages, otherwise auto money), to find called for situations (elizabeth.g., food), or withdrawing the newest payment for the cash. An alternative choice that decrease however, doesn’t eliminate the risk of garnishment would be to circulate money from a bank checking account to a good prepaid credit card otherwise yet another bank account in the a smaller sized lender otherwise credit union. Prepaid service notes or perhaps the new account are subject to garnishment, however they are less inclined to get on creditors’ radar microsoft windows.

When a consumer’s Social Security, SSI, or VA benefits are direct deposited into a bank account or a Direct Express card, a dollar value equal to two months’ worth of those deposits is protected from garnishment, even if the amount in the account is traceable to the stimulus payment instead of to those federal benefits. See 31 C.F.R. § 212; NCLC’s Range Strategies § 14.5.4. Such an account is thus fully protected from garnishment if the account balance is kept below an amount where deposit of the stimulus payment will still keep the balance under two months’ worth of the federal benefits.