Mass Attorney General To Debt Collectors: COVID-19 Stimulus Payments Are Off Limits

The following is a press release from the Massachusetts Attorney Generals office submitted to SOURCE media.

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BOSTON – Massachusetts Attorney General Maura Healey today, April 13, issued guidance to protect consumers who will receive a payment as a result of the federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act from unfair debt collection practices and called on the Trump Administration to take immediate action to ensure these payments go to American families and not debt collectors.

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According to the guidance, the AG’s Office has determined that emergency funds that will be issued to consumers starting this week through the CARES Act are exempt from seizure or garnishment by creditors under Massachusetts law.

The AG’s Office also signed onto a multistate letter to the U.S. Department of the Treasury asking the agency to protect CARES Act payments like other government relief programs and ensure the funds go to individuals and families, where they were originally intended. 

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“These payments are supposed to help individuals and families put food on the table during this crisis, not enrich debt collectors,” AG Healey said. “With this guidance and letter, my office is putting the debt collection industry on notice that these payments are off limits.”

The CARES Act was signed into law on March 27 and provides emergency assistance for individuals, families, and businesses affected by the 2020 coronavirus pandemic. Under the Act, eligible individuals and families can receive cash assistance including a one-time cash payment in the form of a refundable tax credit of up to $1,200 for each individual or $2,400 for eligible individuals filing a joint tax return, plus an additional $500 for each dependent child. Lesser or no amounts will be paid to individuals with higher incomes as measured by the taxpayer’s Adjusted Gross Income.

Massachusetts law exempts certain income and property from debt collection by creditors. The purpose of the exemption law is to ensure individuals have enough income and property to provide for basic necessities like housing, food, and utilities.

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According to the AG’s guidance, any attempt or threat by a creditor or a debt collector to garnish or seize funds provided through the CARES Act violates the AG’s Debt Collection Regulations and the AG’s Emergency Debt Collection Regulations announced on March 27, which prohibit new garnishments during an emergency period. The AG’s guidance, however, does not apply to any actions taken by the Massachusetts Department of Revenue, including any actions taken to collect past due child support.

Visit the AG’s website for more information about the AG’s Debt Collection Regulations and the AG’s Emergency Debt Collection Regulations. The AG’s Consumer Protection Division encourages members of the public to call 617-727-8400 or file a complaint online if you witness or experience aggressive debt collection or predatory lending during this public health emergency.

The AG Healey’s COVID-19 resources page has more information about how the office can assist the public during this crisis.

Today’s letter to the Treasury Department was led by New York Attorney General Letitia James. Joining AG Healey in signing onto the letter are the state attorneys general from California, Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, as well as the Hawaii Office of Consumer Protection.