The federal stimulus package, which is also called the CARES Act, directs the IRS to send you a stimulus check.
Can creditors seize your stimulus checks?
Beware that your federal stimulus checks may be seized by the following parties:
- The IRS for back taxes – If you owe back taxes or an SBA loan, then the IRS can seize the federal stimulus check (just like it can seize tax refunds) to pay back taxes or SBA judgments.
- Back Child Support or Alimony
- Bank overdrafts or lines of credit – if your stimulus payment is being deposited into your bank account that is overdrawn, your bank has the ability to keep part of the funds to pay back your overdraft.
- Creditor garnishment – Don’t forget that creditors can still garnish your bank accounts, and the federal stimulus funds are not exempt from garnishment (like Social Security payments).