T.J. Donovan, the Attorney General of Vermont, has issued a directive to debt collectors, creditors, and financial institutions reminding them that economic stimulus payments made to residents of the state are protected from being garnished under state law.
A copy of the directive can be accessed by clicking here.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, individuals are entitled to receive money from the federal government to help compensate them for lost wages and benefits because of the COVID-19 pandemic. Many states have taken action to protect those funds from new or existing garnishments in order to allow individuals to use all of the money being sent to them. Specifically related to the CARES Act payments, Indiana, Oregon, Illinois, Washington, and Ohio have joined Vermont in issuing orders prohibiting that money from being seized by garnishment orders.
In Vermont, 12 V.S.A. § 2740(19)(I) exempts “compensation for loss of future earnings of the debtor or an individual on whom the debtor was or is dependent” from being included as part of a garnishment.
The Attorney General encouraged individuals who have their funds garnished to file a complaint with the state Attorney General Consumer Assistance Program.
“The CARES Act payments were designed and intended to go into the pockets of Americans and then ripple through the economy as they are spent at the grocery store, to keep roofs over heads, or to keep the lights on,” according to the AG’s directive. “We are all in this together. Each of us – government, financial institutions, and individual Vermonters – must do our part to help the recovery.”
