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Financial Services Law Insights and Observations

Indiana Supreme Court issues order protecting stimulus payments from attachment or garnishment from creditors

State Issues Covid-19 Indiana Debt Collection CARES Act

State Issues

On April 20, the Indiana Supreme Court issued an order in response to a petition for emergency rulemaking to protect stimulus payments under the CARES Act from attempts by private creditors to attach or garnish those payments during the Covid-19 emergency. Pursuant to the order, courts are prohibited from issuing new orders placing a hold on, attaching, or garnishing funds in a judgment-debtor’s account in a depository institution if those funds are attributable to a stimulus payment, with certain exceptions. With respect to previously issued court orders placing a hold on a judgment-debtor’s account in a depository institution, the judgement-debtor is entitled to a hearing, upon request, to determine what funds in the account are attributable to a stimulus payment and for the judgement-debtor to assert any exemption(s) under state or federal law. These measures are effective until the expiration of the Covid-19 public health emergency or until the Indiana Supreme Court suspends the order.