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Funds from stimulus checks are protected from debt collectors

Posted at 12:57 PM, Apr 18, 2020
and last updated 2020-04-18 15:42:44-04

CLEVELAND — Many people are counting on the stimulus payments from the coronavirus economic relief package to help make ends meet, but could that money be snatched by debt collectors?

The Better Business Bureau Serving Greater Cleveland is reminding people that the payments are protected from debt collectors under existing Ohio law. The payments are also exempt from state and federal garnishments and similar collections under Ohio Revised Code 2329.66(A)(12)(d).

Monday, Ohio Attorney General David Yost posted a notice on his website reminding bill collectors that the payments are off limits.

“The stimulus checks were intended to be used during an emergency – to put food on the table, keep the lights on, and a roof over our heads,” Yost said. “It wasn’t meant to pay off an old bill.”

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, stimulus money is protected from state or federal garnishments, but it does not ban private debt collection which is why Yost posted the reminder about Ohio law.

However, the BBB says the money can be collected for things like child or spousal support. Banks can also take a portion of the money to pay off debts owed to them, based on the contract customers signed when they opened the account.

The BBB is urging people to be cautious before handing over any money.

“You need to be aware of somebody that might be posing as a debt collector, claiming that you owe an old payday loan and if they are legally able to get that money from you, so anything that sounds heavy handed and high pressure to take that money from you to pay an old debt, check with the Ohio Attorney General,” Sue McConnell, President of the BBB Serving Greater Cleveland, said.

Yost also signed a letter with 24 other attorney generals asking the U.S. Department of the Treasury to protect stimulus payments from debt collectors.

In the meantime, people can report wrongful debt collections to the Ohio Attorney General’s Office at 1-800-282-0515.

Jade Jarvis is a reporter at News 5 Cleveland. Follow her on Facebook, Twitter, and Instagram.