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Hundreds of Philadelphians could lose their federal coronavirus stimulus checks to creditors and debt collectors

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Hundreds of Philadelphians may be locked out of their bank accounts and could lose their federal coronavirus stimulus checks to creditors and debt collectors, cutting them off from funds they may need to pay rent and buy groceries during the pandemic.
In the three months before the coronavirus crisis closed courthouses, the city’s Municipal Court judges issued more than 400 so-called garnishment orders, which allow people and businesses to collect their winnings after succeeding in civil cases, according to an estimate from Community Legal Services (CLS), a nonprofit law firm that represents low-income residents.

The bulk of the garnishment orders come from cases brought by debt collectors and creditors, who sue consumers when they fall behind on credit card payments and loans, said CLS attorney Laura Smith. Sheriffs often serve the orders on banks to freeze consumers’ accounts, preventing them from spending or withdrawing money.
That means hundreds of Philadelphians may have their funds frozen at a time when millions of Americans are out of work. And they could be blocked from getting federal stimulus checks that weren’t protected from debt collectors when Congress hastily put together the CARES Act, the $2.2 trillion coronavirus relief package. The snatching of relief payments — up to $1,200 for individuals and $2,400 for married couples, plus $500 per child — has sparked widespread criticism, with lawmakers, consumer advocates, and banks calling on federal officials to resolve the issue.

“It’s supposed to be a lifeline to people that are in crisis to buy food and medicine and pay their rent and utilities," Smith said. “But unfortunately, there’s nothing in the law that clearly protects the money from garnishment.”

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Akinola
Akinola
Akinola Olusegun is a blogger and publisher of this blog, money247.com.ng. You can also check out his other blogs : segtv.com.ng (videos & news), letgoonline.com.ng (e-commerce), letgoonline.com.ng/blog (news) among others. Follow him via any or all of his social media pages to get fresh posts update.
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