Third Stimulus Check Garnishment - What You Need to Know

TL;DR

Creditors can potentially garnish your third stimulus check, but it depends on the type of creditor. Federal debts like taxes, student loans, and child support are protected, but private creditors with a judgment can seize the funds.

Transcript

• Hey everybody, John Skiba here, and in this video we're going to talk about this third stimulus check that's going to be hitting your bank account any day now, and whether creditors can take that through the garnishment process. But if this is your first time here to my YouTube channel, go ahead and click subscribe, check on that little bell. Tha... Read More

Key Insights

• 🏦 The third stimulus check of $1400 is expected to be deposited into bank accounts soon.
• 👶 Federal debts like taxes, student loans, and child support are protected from creditor garnishment.
• 💳 Private creditors with a judgment, such as credit card companies or junk debt buyers, can seize the stimulus funds.
• 👻 Claiming the Recovery Rebate Credit on your tax returns may result in the offset of the stimulus check against taxes or student loans owed.
• 🛀 Bankruptcy trustees, in many cases, have shown leniency and are not seizing stimulus funds.
• 👪 Landlords can potentially garnish the stimulus check if they have a judgment for unpaid rent.
• ✅ It is crucial to be cautious and aware of any pending judgments against you if you are expecting a stimulus check.

Questions & Answers

Q: Can creditors garnish the third stimulus check?

It depends on the type of creditor. Federal debts like taxes, student loans, and child support are exempt from garnishment. However, private creditors with a judgment can seize the funds.

Q: What happens if I haven't received the stimulus check but claim it on my taxes?

If you claim the Recovery Rebate Credit on your tax returns for the stimulus check you didn't receive, the federal government can offset it against taxes or student loans owed, potentially leaving you without money in your pocket.

Q: Will the bankruptcy trustee take my third stimulus check?

While there's no specific rule against it, many bankruptcy trustees, including those in Arizona, have stated that they don't intend to take stimulus funds. It would be best to consult with your bankruptcy attorney or research the guidelines in your state.

Q: Can landlords garnish the third stimulus check for unpaid rent?

Landlords can potentially garnish the stimulus check if they have obtained a judgment against you for unpaid rent. It's important to be cautious if you have any pending judgments against you.

Summary & Key Takeaways

• The third stimulus check of $1400 is expected to arrive in bank accounts soon, but there are concerns about creditors garnishing the funds.

• If you owe federal debts like taxes, student loans, or child support, your stimulus funds are protected and creditors cannot seize them.

• However, private creditors with a judgment against you, such as credit card companies or junk debt buyers, can garnish your stimulus check.