Legislation signed in New York preventing stimulus checks from being taken by debt collectors

This week Gov. Andrew Cuomo signed legislation protecting stimulus payments from being garnished by debt collectors.

All relief payments to New Yorkers under these federal acts, including stimulus payments, tax refunds, rebates, and tax credits to support individuals and children qualified for or received prior to the effective date, will be protected. This legislation also creates a carve-out for claims brought by individuals who have an interest in the relief payments to ensure that these funds can be collected to pay child and spousal support and to collect payments in situations involving fraud.

Any person who is subject to a money judgment being enforced against their bank account will receive a notice that COVID-19 stimulus funds are protected and if they have been inadvertently frozen by a creditor, they should promptly return a form included with the notice to get those funds released.




“New Yorkers in every corner of the State felt the effects of the COVIDpandemic, many losing jobs due to no fault of their own and struggling to support themselves and their families,” Governor Cuomo said. “This critical legislation will help ensure relief payments made to New Yorkers are protected from unscrupulous debt collectors so that the money can be used as it was intended – to help make individuals and families whole as they continue to recover from the economic impacts of the pandemic.”

Stimulus payments were provided to individuals and families with children to help them meet their financial needs and support themselves and their families while dealing with the unprecedented economic and health consequences of the COVID-19 pandemic. This new legislation will help ensure New Yorkers have the opportunity to use the full benefit of the financial assistance provided by these federal acts.

Any New Yorker with questions about these protections can call the New York Department of Financial Services Consumer Assistance Unit toll-free at 800-342-3736.

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