Many have received stimulus checks thanks to the CARES Act. But if you were in debt when those funds came through, they weren’t safe from debt collectors. A new executive order has changed that.
“The executive order denies the ability for debt collectors to garnish your CARES act dollars," said Governor Gavin Newsom.
Many Americans received a stimulus check within the past couple of weeks. And whether it was a $1,200 check for yourself or a $500 check for a child, those funds were at the mercy of debt collectors. In wage garnishment, collection agencies are legally able to remove money from an account in order to repay outstanding debt. But that is no longer the case for funds acquired through the CARES act. Governor Gavin Newsom signing the executive order late Thursday morning.
“It’s also retroactive, so if you're a debt collector and you did garnish those contributions, those checks, you have to give them back, so that is effective immediately," Newsom said.
The Governor said his legal team had been organizing the framework of the executive order over the previous few days. He said he’s proud of what they came up with because the nature of the COVID-19 emergency means that this is no time for debt collectors to be garnishing emergency funds.
"There is a caveat, however, because we have a family-first focus, if you owe child care, if you owe spousal support, this does not apply to you," Newsom said.
The governor also said if someone has a responsibility to a victim or a victim's account, those people do not apply as well.