Third Stimulus Check Update - Debt Collectors Encouraged to Allow Payments to Reach Consumers | Summary and Q&A

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March 17, 2021
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Consumer Warrior
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Third Stimulus Check Update - Debt Collectors Encouraged to Allow Payments to Reach Consumers

TL;DR

Learn what to do if your stimulus check is garnished or if your account is overdrawn when the third round of stimulus checks arrives.

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Key Insights

  • 🏦 The third round of stimulus checks does not protect against garnishment by private creditors, including banks.
  • 💦 The Consumer Financial Protection Bureau has been working with financial institutions to address the issue of overdrawn accounts when stimulus funds are deposited.
  • 🏦 It is advised to contact your bank if your account is overdrawn and your stimulus check is being deposited to discuss the situation and request the funds for essential living expenses.
  • 🤱 Using a preloaded debit card, if available, can help mitigate the risk of garnishment or overdraft fees with the stimulus funds.
  • 💦 While there is hope that banks will work with customers in these circumstances, it is essential to be proactive and reach out to them for assistance.
  • 🤪 The stimulus checks are intended to help individuals going through financial difficulties, and efforts are being made to ensure the funds are accessible and not entirely consumed by garnishments or fees.
  • ❓ The Consumer Financial Protection Bureau has issued a consumer advisory report with steps to navigate the process of protecting stimulus funds from garnishment or overdrafts.

Transcript

  • Hey everybody, John Skiba here. And in this video we're going to be talking about stimulus checks. The third round was just recently approved. They're going to be hitting your bank accounts in the very near future. And I'm going to talk about specifically what you can do if you find yourself in a situation where your stimulus check has been garni... Read More

Questions & Answers

Q: What should I do if my stimulus check is deposited into an overdrawn account?

Contact your bank and explain the situation, emphasizing that the funds are essential for basic living expenses. Banks have shown some willingness to work with customers in these circumstances.

Q: Are the third round stimulus checks protected from garnishment by private creditors?

No, unlike the previous rounds, this round does not have protections against garnishment, including by banks.

Q: Will financial institutions restore funds to individuals with overdrawn accounts due to stimulus deposits?

The Consumer Financial Protection Bureau has collaborated with banks to address this issue and many institutions have pledged to promptly restore funds to affected individuals.

Q: How can I avoid garnishment or overdraft fees with my stimulus check?

If you receive a preloaded debit card instead of a direct deposit, use that card to avoid potential garnishment or overdraft fees.

Summary & Key Takeaways

  • The third round of stimulus checks has been approved and will be deposited soon, raising concerns about garnishment and overdrawn accounts.

  • The Consumer Financial Protection Bureau has addressed the issue and worked with financial institutions to restore funds to individuals with overdrawn accounts.

  • Unlike the first two rounds, this third round does not have protections against garnishment from private creditors, including banks.

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