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Bill would keep collectors from seizing stimulus checks

State legislators are mulling legislation that would keep bill collectors from taking people’s latest federal stimulus checks to pay for back bills.

Assemblywoman Helene Weinstein, D-Brooklyn, the federal laws that authorized the stimulus payments did not consistently include explicit language designating the relief payments are protected from seizure to satisfy judgments.

“I should note in the earlier stimulus bills there was language specific language on the federal level that protected these funds and made them exempt from collection,” Weinstein said. “This last round because of how the American Recovery Act was adopted that language was not able to be included in the federal legislation, which is part of what necessitates the need for state action.”

A.6617, which passed the Assembly 112-38, stipulates that relief payments originating from these federal laws are not subject to garnishment and clarifies that all relief payments to New Yorkers under these federal acts, including all money related to children, and all money New Yorkers qualified for or received are protected.

Assemblyman Andrew Goodell, R-Jamestown, voted against the legislation because there is no provision that would exempt those who have not faced economic hardship from the pandemic to have to pay their bills.

“So if you never lost any employment your income is the same, and you received thousands and thousands of dollars in stimulus from the federal government, why wouldn’t we require or expect that person to, for example, use those funds to pay their rent, or their mortgage, or their utilities?” Goodell asked.

The bill’s legislative justification states that the state Legislature finds that New Yorkers should have the opportunity to use the full benefit of the financial assistance provided by the stimulus payments, and that any seizure of the money by bill collectors deprives recipients of the ability to support themselves and their families and increases racial inequity.

“In distributing the stimulus funds, the federal government does not sit and ask whether you lost your job or didn’t lose your job,” Weinstein said. “The idea is that it is for so many families that have been hard hit that these funds should be used for some of these necessities. The procedure is there. We’ve protected other funds and will continue to protect other funds, like veterans benefits, without interrogating the individual veteran whether they have other income that would allow them to pay a debt. We feel these funds should be at these same level.”

The legislation creates a carve out for claims brought by individuals who have an interest in the relief payments based on their status as spouses or dependents, or in situations involving fraud — meaning action could be taken in Family Court for child support, spousal support, or orders of protection, matrimonial actions and civil claims.

Goodell said he supported the carve-out for Family Court claims and said he supports not allowing unemployment benefits to be seized because the fact someone is on unemployment proves the person has faced economic loss. But, Goodell said, A.6617 still should have included some requirement to show economic loss before the money is placed off-limits from bill collectors.

“So what we’re saying is great news, you got thousands and thousands of dollars of taxpayer money even though you never lost a day of work, but you don’t have to pay your bills,’ Goodell said. “And if you get a judgment against you, which would be unique in New York since we shut down the courts, but if you had a judgment against you, you don’t have to pay the judgment either. … I understand if you’ve suffered an income loss due to COVID and you need this money which came through a fed stim program. I understand that. I’m with you. I have to say I don’t think it’s right that you take thousands and thousands of dollars from the federal government, from taxpayers, and thumb your nose at all your creditors. I think it’s inappropriate and the wrong message to send.”

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