Debt Collectors and Your Stimulus Check: What to Know

The Economic Income Payments, more commonly known as stimulus checks, are steadily being received by the millions of Americans who qualify.

These payments are calculated and issued by the Internal Revenue Service (IRS), as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These payments provide emergency financial assistance to the many struggling due to COVID-19 impacts. As these checks trickle into bank accounts, questions arise on the fine print. Those in debt may be concerned that this check will be taken. However, there are means in place to safeguard this money, and measures for the individual to protect it.

Stimulus Check Eligibility Requirements

According to the IRS website, the requirements to receive a stimulus check are:

    • You are a U.S. citizen, permanent resident or qualifying resident alien
    • You cannot be claimed as a dependent on someone else’s return
    • You have a Social Security number (SSN) that is valid for employment (valid SSN)
      • Exception: If either spouse is a member of the U.S. Armed Forces at any time during the taxable year, then only one spouse needs to have a valid SSN
    • You have adjusted gross income below an amount based on your filing status and the number of your qualifying children

How the IRS is Gathering Information

Their website also outlines how the IRS is gathering information on who is eligible and how they are distributing checks. If you filed a 2018 or 2019 tax return, receive Social Security retirement, Social Security Disability Insurance, survivors benefits, supplemental security income, or Railroad Retirement benefits, the IRS already has the information needed to calculate your payment and get it to you. No further action is needed from you if you fall under one of those qualifications.

Getting Your Information to the IRS

If these do not apply to you, the IRS will need some information from you before they can process your stimulus check. The IRS Non-Filer tool can be used by U.S. citizens and permanent residents who had a gross income under $12,200 for 2019 and were not required to file a 2019 federal income tax return. An alternative method to get your information to the IRS is filing a federal income tax return for 2019, even if you would not normally need to file a return or you receive non-taxable income. The sooner the IRS receives your information, the sooner they can determine your eligibility and issue your payment.

Stimulus Check Protections

Those facing debt problems before the pandemic may find themselves concerned over how secure this payment is. These checks are protected against being collected for overdue federal student loans and unpaid taxes, however it can be garnished for unpaid child support payments. Though these safeholds are in place, they may not be protected from private debt collectors. If you owe credit card, medical, or private student loan debt, you may be at risk of having your check garnished. Lauren Saunders, Associate Director of the National Consumer Law Center, has offered suggestions to avoid this. She says to avoid this, closely monitor your bank account and take out this money once received. Also, keep in mind collection agencies cannot garnish checks that are not in the bank account they have access to. The stimulus check will be deposited in the same bank account that your tax refund was deposited into. Experts note the importance of monitoring your accounts and knowing your rights with debt collection agencies.

The stimulus checks are being paid in an effort to support the economy as we all continue to feel the effects of COVID-19. For more information on your own payment and eligibility, visit https://www.irs.gov/coronavirus/economic-impact-payment-information-center.