Unfortunately, the above applies only to federal and state debt. Experts have warned that banks may be able to garnish your stimulus payment for private debt collection, with a top U.S. Treasury official reportedly telling banks that “there’s nothing in the law that precludes that.”If you have outstanding loans or owe bank fees, your bank could automatically take the money to offset those debts. Because the stimulus payments are categorized as refundable tax credits and not federal benefits, they can be garnished for debt. Congress made an exemption on garnishment for federal and state debt when it passed the CARES Act, and it also gave the Treasury the authority to write additional exemptions for private debt. Senators Sherrod Brown of Ohio, Elizabeth Warren of Massachusetts, and Ron Wyden of Oregon wrote a letter to Treasury Secretary Mnuchin on April 3rd informing him that private debt collectors can garnish stimulus money. So far, the department has made no move to write an exemption protecting the checks.