Garnishment Protection Bill Advances in Va. Legislature

Even as many states are moving to ease collection restrictions that were put into place at the start of the coronavirus pandemic, the Virginia legislature is moving forward with a bill that would protect the economic stimulus payments received by individuals from being garnished by debt collectors.

A number of states — including California, Vermont, Indiana, Oregon, and Washington — enacted laws or otherwise made it known that stimulus payments received by individuals under the Coronavirus Aid, Relief, and Economic Security (CARES) Act were not to be touched by debt collectors. Even the U.S. Senate passed a bill that said stimulus payments should be protected from garnishment similar to how Social Security payments are exempt.

A bill — HB 5068 — was introduced in the Virginia legislature last week by Delegate Hala Ayala and has been endorsed by Mark Herring, the Attorney General of Virginia. Yesterday, the House Committee for Courts of Justice unanimously approved the measure, which would prohibit the service and issuance of garnishments on financial institutions unless a notice of exemption or claim for exemption is attached, allowing the individual to select from a list of categories under which garnishments are not allowed. The bill adds “Emergency relief payments” to that list. Those are defined as “any payment made by a local, state, or federal government body pursuant to a law, ordinance, order, or regulation that specifically designates such payments as intended to provide economic relief due to the condition that caused a state of emergency to be declared,” by the Governor.

“This pandemic has also exacerbated the economic and racial disparities that persist in communities across Virginia and has unfortunately put many families in tough financial situations,” Herring said in a statement. “It’s so important that we protect economic relief payments from debt collectors during this time so that families can use that money to put food on the table or to pay their utility bills or rent. We must all work together to help get the Commonwealth through this pandemic and make this difficult time a little easier for all Virginians.”

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