Should Debt Collectors Be Allowed To Reap The Rewards Of Economic Relief Payments?

In the ten days following passage of the new economic relief in Congress, the Internal Revenue Service tried to send out (by mail or electronic transfer) 100 million checks to Americans and businesses in need. But in the days immediately after Congress passed the relief, news articles about the possibility of debt collectors swooping in to steal those funds were published by the hour. Should debt collectors be allowed to steal those payments?

Not according to a new law from Virginia Attorney General Mark Herring and Delegate Hala Ayala (D-51st District). Virginia authorities had already discovered the loophole allowing debt collectors to take the funds away from the most vulnerable Americans during the last round of $600 checks — and they decided to close the loophole immediately. A bill doing exactly that was passed late last year during a special legislative session.

Herring said, “The most recent round of federal payments represents a lifeline for so many Virginia families who are still struggling to make ends meet because of the economic impacts of the COVID pandemic. Virginians should not have to worry about creditors or debt collectors taking all of their much-needed stimulus money and I’m glad Delegate Ayala and I were able to work together to get this important legislation passed. As we continue to navigate these unprecedented times, we must always put Virginians and their families first.”

Many Americans have been unemployed since early last year due to the coronavirus pandemic, a situation that got them into debt in the first place. It would be downright cruel to tease any form of financial relief, only to have it stolen by debt collectors.

Ayala said, “Thousands of Virginia families are still struggling to support themselves during this uncertain economic time and they need this stimulus funding to go towards food, rent, utilities and other necessities. This past year has forced us to come up with creative solutions in order to support Virginians and their families through these difficult times and I want to thank Attorney General Herring for his help with this legislation.”