Coronavirus, COVID-19, Debt Relief

5 Ways to Protect Your Stimulus Check from Creditors

As Americans begin receiving their stimulus checks from the $2.2 trillion CARES Act, many who are struggling with debt, worry this money will be intercepted by creditors seeking payment. More than 80 million stimulus checks have been processed thus far, which is a huge source of relief for the 20 million Americans out of work.

Many creditors view these stimulus payments as a chance to receive payment on outstanding debt, especially those that have already been reduced to court judgments. If a financial institution is given a garnishment order, it is possible they will immediately freeze that amount of money deposited into the account, only providing the consumer a limited amount of time before the funds are taken by the creditor.  However, certain measures can be taken to protect this stimulus money from creditors.

Review History with the Bank.

If the consumer already has a good working relationship with his or her bank, the account may be safe from garnishment. However, if the person has had his or her account garnished before, it is more likely that it will happen again. If the person has a good relationship with his or her bank, someone from the bank will reach out to that person when receiving a notice of garnishment before taking out the funds.

Be Aware of Florida’s Laws.

The CARES Act includes protection from the stimulus money being seized by the federal and state government for debt collection, but it does not prevent private debt collectors from seizing the money. While many states have laws on the books that prevent this from happening, Florida, unfortunately, does not, which means the consumer should keep an eye on his or her account and should withdraw the money as soon as it is received to protect the funds.

Request a Paper Check.

One way around the possibility of garnishment is to not put the money into a bank account at all. By cashing a paper check and not depositing the money into a bank account, the consumer is not necessarily exempt from his or her creditors seeking the money, but it does protect the person from the possibility of that money being taken immediately out of the account. If the consumer intends to take this route, hold onto the cash after the check is deposited, in the event a creditor does seek this money through legal means. Consult a consumer attorney if you have any questions regarding protecting this money in the event you need it for daily living expenses.

Consider Alternate Forms of Payment.

The stimulus payments can also be directed into other forms, including a prepaid debit card. They can also be directed into bank accounts at smaller banks or credit unions. Creditors may be less likely to attempt a garnishment order. Prepaid cards are not entirely exempt from garnishment, but seeking money from cards is more difficult than it is from a larger bank account. Keep in mind, if someone owes money through a court judgment, there is not a guarantee that these actions will save the money, but it does make it more difficult for creditors to accomplish.

Recipients of Federal Benefits Protected.

If the consumer receives Social Security, SSI, Veteran’s benefits or other federal benefits, a special rule from the U.S. Treasury exempts certain amounts from being garnished. This rule protects amounts in a bank or direct express card from being garnished in the amount equal to two months of federal benefit payments for the recipient. If the stimulus check is received and the account has that much in it, the consumer’s money should be protected under this federal law.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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