Can Collectors Take Away Your Incentive?
Due to a quirk in the way the last bailout bill was passed, your $ 1,400 incentive checks could have been received by private debt collectors . There is talk of following up on the problem, but it may be too little, too late.
What’s happening?
To avoid obstructing Republicans, Democrats passed the bailout bill using a procedure known as budget approval , which requires only a simple majority to pass the bill in the Senate. (The Senate is currently deadlocked – 50-50 between Republicans and Democrats, with Vice President Kamala Harris casting a decisive vote as Senate President.)
However, as part of the budget reconciliation, the so-called Byrd rule limits what can be included in reconciliation invoices. The Senate MP enforces this rule, and sometimes they remove provisions in the so-called ” Byrd bath ” (the provisions removed from the bill are called “Byrd’s droppings” – no kidding). Whether the debt collection clause was scrapped pending Byrd’s rule or removed by an MP, it was not included in the final bill.
This has made it possible for private companies to collect their debts, especially those with a court order to place a claim in your bank account. While previous checks were protected from private debt collectors, this check is an exception.
Note that the IRS will not collect government debt, such as tax arrears or student loan arrears, from your check. However, as CNET points out , there is an exception: if your third incentive check is missing and you claim it next year as a rebate as a rebate, the IRS may use some or all of the money for outstanding student loans or child support, according to the publication.
What can you do about this
According to Fortune, advocacy groups such as the American Bankers Association are urging Congress to address the issue and pass separate legislation that prevents collectors from collecting money. Oregon Senator Ron Wyden (D), chairman of the Senate Finance Committee, has promised to do so, but there is currently nothing in federal bill to prevent debt collectors from getting your check. However, if legislation moves quickly, it is possible that foreclosure can be prevented before debt collectors get to it.
Also, some states, such as California, do not allow incentive checks, so you need to check if your state has such protections .
Finally, if you are at risk of getting an overlay of money, you can simply withdraw money from the account as soon as you see that it is credited to the account. Lauren Saunders, deputy director of the National Consumer Protection Center, suggested in an interview with Yahoo! “If [people] think they are at risk of confiscation, they should monitor their account and collect the money immediately.”