New York Attorney General Letitia James recently took action to block debt collectors from seizing billions of dollars in emergency stimulus payments authorized by the American Rescue Plan Act of 2021.
James issued official guidance to New York state banking institutions, creditors and debt collectors, making clear that financial relief provided through stimulus payments are exempt from garnishment under New York law.
The American Rescue Plan Act authorized the U.S. Department of Treasury to send billions of dollars to Americans struggling as a result of the economic fallout of the COVID-19 pandemic. James says the emergency stimulus payments were not designated as exempt from garnishment, allowing debt collectors to potentially benefit before consumers.
The guidance does not apply to any actions taken by the state of New York, including, but not limited to, any actions to collect past due child support.