Consumer Advocates Applaud Passage of American Rescue Plan, Call for Protection from Debt Collectors

3 min readMar 10, 2021

Advocates at the National Consumer Law Center praised Congress for passing the $1.9 trillion American Rescue Plan Act of 2021 to help struggling families. But they noted that more needs to be done to protect the new payments from being seized by debt collectors.

Under key elements of the American Rescue Plan (ARP):

individuals will receive up to $1,400 in economic income payments (EIP) and an additional $300 per week for unemployment benefits through Labor Day.
The package also includes an expanded Child Tax Credit of up to $3,600 per child paid in part through advance monthly payments,
$20 billion for rental assistance (which can also be used for utility arrearages and current bills),
$10 billion to help prevent foreclosures through the Homeowner’s Assistance Fund,
$7.6 billion for broadband for schools and libraries to help close the homework gap for students,
$4.5 billion for energy bills through the Low Income Home Energy Assistance Program (LIHEAP) and $500 million for emergency low-income water assistance.
The stimulus package also closes a longstanding loophole that encouraged predatory post-secondary schools to target servicemembers and veterans for their military education benefits, and eliminates taxes for cancelled student debt from December 31, 2020 through January 1, 2026.

“The stimulus is an essential shot in the arm to help families pay for food, rent, medicine, and auto loans, and stay connected to essential utility services,” said National Consumer Law Center Associate Director Lauren Saunders. But Saunders noted that the new bill, unlike the December stimulus bill, fails to prohibit debt collectors from garnishing bank accounts to grab stimulus payments. “Now Congress must take immediate action to ensure that the economic stimulus payments feed families as intended rather than debt collectors.”

“The Homeowner Assistance Fund, which provides the first cash assistance for homeowners during the pandemic, will help prevent thousands of foreclosures, especially in communities of color,” said Alys Cohen, staff attorney at the National Consumer Law Center. “This new program will help homeowners facing COVID hardships catch up on their mortgages, property tax or insurance payments, and…