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Covid-19 Update – Is Help on the Way?

On Behalf of | Apr 20, 2020 | Consumer Protection

We are now approaching a full month since most states have been issued stay-at-home orders. During these past weeks, job loss rates have spike as business effected by the shut-down have been forced to lay off or furlough workers. As for how this all affects each consumer economically, we are still looking for all the answers. However, some helpful solutions have been provided as a temporary fix – depending on your state.

The National Consumer Law Center has provided some publications on how some states and the federal government have reacted to help those effected. NCLC has always provided a great deal of assistance to consumers and consumer rights attorneys.

On the federal level, the federal government’s CARES Act has provided protection for home loans that are federally backed. this makes up for about two-thirds of the loans out there. Under the CARES Act, a servicer of federally backed mortgage loan may not initiate any judicial or nonjudicial foreclosure process, move for a foreclosure judgment, order a sale, or execute a foreclosure-related eviction or foreclosure sale. This should provide a sufficient amount of breathing room for consumer’s with these federally backed loans so that they do not have to worry about vacating their homes in the immediate future. For the remaining 1/3 of the loans in this country, some states have enacted their own legislation for protection. Some states have only addressed evictions, and some have provided for a temporary stay on any foreclosure proceedings. A list can be found here.

Wage garnishments are always a huge worry for consumers who have judgments. The CARES Act did nothing to protect consumers income from garnishment or attachment. This included the $1,200 stimulus check – these were not deemed to be exempt from garnishment or attachment. However, some states have enacted temporary legislation to halt any garnishments from proceeding in their states. Illinois, Washington, Texas, Massachusetts, and the District of Columbia are the only ones with a current rule on the books that stays or suspends any collection or garnishment for a period of time. For the time being at least, consumers in those states that are able to receive stimulus funds or even a paycheck can have some relief that for the time being their money is safe. However, these are all temporary. States will be forced to reduce these restrictions as soon as it is reasonable. Consumers and creditors will argue forever as to when it is considered reasonable. Ultimately, that will come down to our elected officials to decide. Did we mention that elections are coming in November?

We’ve certainly heard complaints that the stimulus checks are quite low and do not provide nearly the help that people need. However, so many of us have small businesses, and our small business is our life – and the means to pay our bills. The Payment Protection Program provided by the Small Business Administration has provided a benefit to many. Billions of dollars have been given out as loans with a promise to treat is as a grant as long as it is used to pay your employees and keep your lights on. While the funds were eaten up pretty quickly, stories in today’s news indicate a deal for the release of more funds is very near.

We invite you to seek a legal consultation – at no cost to you – if you believe you are being treated unfairly during the pandemic, and let us know if you believe your creditors or collectors are not playing by the new rules. SmithMarco, P.C. is here to try to help.