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Can my stimulus payment be garnished or be subject to a lien?

On Behalf of | May 5, 2020 | unemployment |

No. The $1200 stimulus payment to Maryland residents and the rest of the country as part of the federal legislation — the Coronavirus Aid, Relief and Economic Security (CARES) Act – recently approved by Congress can’t be garnished in Maryland to pay debts except those related to child support and can’t be taken by the state’s banks and credit unions to offset debts.

Gov. Larry Hogan signed an Executive Order on April 29 forbidding garnishments, liens or levies on the funds except when connected to child support obligations.

According to the order, “no banking institution or credit union incorporated under the laws of Maryland shall have any lien upon or right of setoff against funds in any customer’s or members account to the extent the funds are traceable to the CARES Act stimulus payment.”

Hogan said that “it is reasonable to prohibit certain garnishments, liens and set-offs against the emergency financial assistance paid to Marylanders under the CARES Act, to ensure that Marylanders may use the full benefit of that financial assistance to protect their lives and property.”

Other states have also taken steps to prevent the stimulus funds from being seized. New York has blocked banks and debt collectors from seizing stimulus payments to residents authorized by the CARES Act. Ohio Attorney General David Yost has warned creditors that the one-time government checks are protected by state law from garnishment. Oregon Gov. Kate Brown recently signed an executive order barring debt collectors and creditors from seizing the stimulus checks sent to Oregonians under the CARES Act.


The CARES Act provides cash assistance to individuals and families. The federal law allows for a one-time cash payment of $1200 to individuals and $2400 for married couples, plus an additional $500 for each dependent child, depending on income.

Because of the detrimental impact the coronavirus is having on the economy, Congress intended the emergency support to be used to pay for basic needs such as rent, mortgages and food. As a result, the governor has decided to protect the money from garnishment by Maryland’s financial institutions and debts owed to state and federal governments, according to the Maryland Attorney General (Maryland AG).

However, the CARES Act did not include a provision to protect stimulus payments from debt collectors or creditors in bankruptcy.

Penalties for violating the Executive Order

Violations of the governor’s Executive Order are a violation of Maryland’s Debt Collection Practices Act and Consumer Protection Act and are subject to enforcement and penalties, the Maryland AG has said.

Under the Maryland Debt Collection Practices Act, it is illegal for a person collecting a consumer debt to claim, attempt, or threaten to enforce a right with knowledge that the right does not exist, the Maryland AG has explained.

The Consumer Protection Act prohibits any unfair, abusive, or deceptive practices in the collection of consumer debts. A person violating the Consumer Protection Act is subject to paying injunctive relief, restitution and civil penalties of up to $10,000.00 per violation, the Maryland AG has noted.

The Law Office of Thomas J. Maronick is open during the pandemic and will continue to meet your Ocean City and surrounding areas, Baltimore City and Baltimore county legal needs. A Baltimore/Ocean City attorney can help with the legal issues you are facing such as debt collection, garnishments and liens and filing for bankruptcy. The consultation is free. We can meet with you remotely if you have access to Zoom. You can contact Thomas Maronick on his cellphone at 410-881-4022, the law office at 410-881-4022 or through the website for a free consultation.



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