Massachusetts Attorney General Maura Healey issued on Tuesday the latest in a series of orders regarding debt collection in the face of the coronavirus (“COVID-19”) outbreak. The most recent guidance document is aimed at protecting the relief payments that many Americans expect to receive in coming weeks thanks to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).
Massachusetts law exempts certain income and property from garnishment or attachment by creditors, including public assistance payments. Public assistance includes cash and in-kind benefits provided to individuals on a means-tested basis. The federal payments under the CARES Act are means-tested, meaning that individuals with incomes above a certain level will receive reduced payments, or no payment at all; thus, Attorney General Healey has ordered that those payments constitute public assistance and are exempt from garnishment.
Attorney General Healy already issued an emergency regulation regarding debt collection, which included a ban on new garnishment actions as just one of many consumer protection measures. This latest order, however, is written specifically to provide an extra level of protection for recipients of CARES Act payments and to ensure that they go to the families who need them.
For regular updates about the latest COVID-19 and CARES Act impacts on the financial services sector, be sure to visit the Pepper Hamilton/Troutman Sanders COVID-19 Resource Center.