As stimulus checks are heading towards millions of Americans in need under the CARES Act, be mindful that the proceeds of the check may fall into the arms of a judgment creditor, or can be offset by your bank if your account is overdrawn. While some jurisdictions instituted emergency regulations to protect these funds from seizure by private creditors, New York state does not appear to be one of them. Accordingly, if a creditor has a judgment against you, your bank account remains subject to seizure even if some, or all, of the funds in the account came from the proceeds of the stimulus check.
However, If you owe the federal government for defaulted student loans or back taxes, the proceeds of the stimulus check will not be subject to seizure or offset. Your anticipated tax refund for 2019 will also not be offset by the stimulus check. Child Support owed is not entitled to such protections.
Accordingly, if you have a judgment against you the creditor may seize this opportunity to place a restraint on your bank account. Although this situation is subject to change as congress and consumer groups implore the government to issue protections concerning the stimulus check, as it stands as of this writing, in New York, your stimulus check may be in danger of seizure.
If you find yourself in need of legal representation as a result of a frozen bank account, or any other debt related issue, please contact the office for an evaluation. In these trying times, having competent counsel may be the best way to navigate your debt related issues.
Call the Law Office of Simon Goldenberg, PLLC at (888) 301-0584 for a free legal evaluation.