Senate Passes Bill Blocking Debt Collectors From Garnishing Stimulus Checks

July 24, 2020 Updated: July 24, 2020

The Senate on Thursday passed a bill that prevents debt collectors from taking money from stimulus checks authorized in virus-relief packages.

S. 3841 “is a common sense measure that will ensure the $1,200 Economic Impact Payments Congress provided to help individuals meet essential needs during these trying times don’t instead end up in the pockets of creditors and debt collectors,” Sen. Chuck Grassley, who introduced the bill in May, said in a statement.

Sens. Sherrod Brown (D-Ohio), Tim Scott (R-S.C.), Chuck Schumer (D-N.Y.), Chris Van Hollen (D-Md.), Ron Wyden (D-Ore.), and Jack Reed (D-R.I.) cosponsored the measure.

“Congress came together to pass the CARES Act, which provided money to help working families pay for food, medicine, and other basic necessities–it’s not for debt collectors. Our bill will protect these funds and ensure working families receive the help they need,” Brown said in a statement.

Senators called on the House to pass an identical measure so Republican President Donald Trump can sign the legislation into law.

While the Senate passed the bill by unanimous consent, it’s being held until the Senate receives a bill from the House that has text “identical to that of S.3841,” Senate Majority Mitch McConnell (R-Ky.) said on the Senate floor in Washington.

The House and Senate passed the CARES Act in late March and Trump signed it on March 27. The $1.8 trillion package included funds for sending most Americans checks.

But the package included no provisions against garnishment from debt collectors, prompting the new legislation.

The new Senate bill continues the exception for child support enforcement orders to ensure non-custodial parents who owe back child support fulfill their legal and moral obligations to their children.

Republican and Democrat lawmakers, along with key White House officials, are currently negotiating another major package aimed at providing relief from the unemployment and other negative effects of the lockdowns imposed to try to curb the spread of the CCP (Chinese Communist Party) virus.

Treasury Secretary Steven Mnuchin confirmed earlier Thursday that the Republican proposal will mirror the CARES act as far as direct payments.

The CARES Act provided up to $1,200 payments to individuals making up to $75,000 per year, with less going to those making over that amount. Children received $500 under the measure.

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