BALTIMORE — Debt collectors cannot garnish any wages that Maryland citizens received from stimulus payments issued by the federal CARES Act.
Maryland Attorney General Brian Frosh put out an advisory on Thursday, reminding state residents that Governor Larry Hogan's April 29 Executive Order prohibits financial institutions from garnishing this financial assistance, except in child support cases.
The CARES Act provides a one-time $1,200 cash payment for individual tax payers and $2,400 for people filing joint returns, in addition to $500 for each dependent child. Payments are made to individuals making $75,000 or less annually and couples making $150,000 or less.
CARES Act payments were given out to tens of millions of struggling Americans needing help with bills amid the COVID-19 pandemic.
The CARES Act exempts the stimulus payments from collection for debts owed to state and federal governments. Governor Hogan's Executive Order prohibits Maryland banks and credit unions from using stimulus payments to offset debts.
Frosh says the Executive Order is backed up by the Maryland Debt Collection Practices and Consumer Protection Acts. 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 Consumer Protection Act also prohibits any unfair, abusive, or deceptive practices in the collection of consumer debts. Violators could be forced to pay injunctive relief, restitution, and civil penalties of up to $10,000.00 per violation.
