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Stimulus payments subject to debt collections

Jessica Kushner.jpg
Posted at 7:03 PM, Mar 19, 2021
and last updated 2021-04-07 13:39:19-04

COLORADO SPRINGS, Colorado — As stimulus payments are being distributed this week, some families in Southern Colorado will not receive the relief funds they were expecting.

Jessica Kushner was surprised by the amount of stimulus payment deposited into her and her husband's bank account Thursday.

"His portion actually got put into our bank account and my portion is not there," she said.

She later found out that her portion of the relief money was intercepted to pay for overdue court fees and restitution from a misdemeanor conviction from more than a decade earlier.

Kushner knew she owed the court debt and said she's tried to make payments on it, but the collection from her stimulus came as a surprise.

"There's other bills that are due that concern survival rather than past-due court fines, fees, and restitution," Kushner said.

When Congress passed the latest stimulus bill, it used a procedure known as budget reconciliation. It allowed for a simple majority vote, but as a consequence, wage garnishment protections from previous stimulus bills couldn't be included.

A spokesperson for the Colorado Department of Revenue explained that state agencies regularly intercept money this way from individual income tax returns if a taxpayer owes money to the state in the form of court fees, unpaid child support, student loan debt, or overpayments from government benefits.

Kushner called the governor and her congressman to try and give them the message that paying debt collectors isn't stimulating the economy.

"That's what most poor people have is private debt collection, and it's not going to stimulate any economy if private debt collectors are being paid," she said.

UPDATE: Mrs. Kushner received her stimulus payment in full after this story aired. Additionally, the Colorado Judicial Branch can only intercept money from Colorado income tax refunds as payment toward court debts. It does not intercept federal funds.