Stimulus Funds Could Be Accessed by Creditors

Starting this week, many North Carolinians will be receiving emergency stimulus payments authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). For many individuals, that payment will be directly deposited into their bank account. Our Attorney General joined with several other state attorneys general on April 13, 2020 to request that the U.S. Department of the Treasury take immediate action to protect these funds from being accessible to creditors and instead ensure that the money goes to individuals to use for housing, food and other urgent needs.

Right now, however, unlike Social Security, disability, and veterans’ payments, which are statutorily protected from a bank account levy, the CARES Act does not explicitly identify this stimulus money as being exempt from collection by creditors. This means that once the stimulus money is deposited into an individual’s bank account, the money is likely subject to being levied by creditors who follow the proper collection procedure set out in our statutes. (http://lawfirmcarolinas.com/blog/judgmentnow/ for a link to a previous blog detailing the process for collecting on a judgment in North Carolina). As part of the collection process, a judgment creditor may obtain a Writ of Execution to give to the Sheriff. If the Sheriff is able to locate a bank account in the name of the judgment debtor, the Sheriff can require the bank to turn over any and all of the money in the bank account, up to the full judgment amount.

            The attorneys at Black, Slaughter & Black have significant experience representing both creditors and debtors in post-judgment collections and would be pleased to assist you to ensure that you understand your rights.