New Virginia Law Protects $600 Economic Relief Payments From Debt Collectors

RICHMOND, Va. (WSET) — A new law in Virginia aims to make sure the second round of economic stimulus payments will help Virginians support themselves and their families instead of getting swept up by debt collectors and creditors.

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Attorney General Mark Herring and Delegate Hala Ayala sponsored a bill that will protect that stimulus payments. HB5068 passed in this year’s special legislative session after Herring discovered the initial round of $1,200 payments was vulnerable to seizure or garnishment.

“After nine months of economic fallout from the COVID crisis, these payments are even more important than ever for thousands of Virginia families who are counting on this money to help them make ends meet for another few weeks,” said Attorney General Mark Herring in a statement. “Though the payments would have been much larger if not for Republican obstruction, they nevertheless offer some much needed support. I’m glad we were able to identify this problem and enact a solution that will keep this badly needed assistance, and other assistance that may come in the future, from getting scooped up by debt collectors and creditors. People should come first in this crisis, not debt collectors.”

When Herring discovered the CARES Act relief payments were not explicitly protected from garnishment, he urged Treasury Secretary Steven Mnuchin to take steps to ensure the payments would benefit struggling Americans rather than creditors and debt collectors.

In the 2020 COVID and Criminal Justice Reform Special Session, the General Assembly passed HB5068 from Attorney General Herring and Del. Ayala with bipartisan support.

The bill exempts state and federal emergency relief payments from garnishment, attachment, and other legal creditor process seizures.

It included an emergency clause ensuring it went into effect immediately upon Governor Ralph Northam’s signature.

Attorney General Herring and I put forward this important protection for Virginians because we knew that thousands of Virginia families would struggle to support themselves during this economic crisis, and that every dollar of federal support would need to go directly to food, rent, medicine, and other necessities, not just to the bottom lines of debt collectors and creditors,” said Del. Ayala. “Working together, we were able to identify and solve a problem to support Virginia families and to give them a little more security and support during these incredibly difficult economic times.”
If anyone believes their economic relief payment has been unlawfully garnished or seized, Herring said they can reach out to his Consumer Protection Section for additional information and assistance.