Bill Introduced in House That Again Allows Forbearance on All Debts

A bill has been introduced in the House of Representatives that would put limits on what creditors and debt collectors can do to try and recover unpaid debts when a national emergency has been declared and for a period of 120 days when the declaration is over.

The bill, the Consumer Relief During COVID-19 Act, H.R. 7796, was introduced by Rep. Joyce Beatty [D-Ohio]. It has been referred to the House Financial Services Committee for its consideration.

“The Consumer Relief During COVID-19 Act will provide much-needed financial relief by ensuring that no one loses their home, car, utility service or the like in the interim because of this spiraling public health crisis or any future national disaster,” said Rep. Beatty, in a statement. “I urge my colleagues to support the bill and will work tirelessly to see that it or a similar proposal is included in any future COVID-19 response package.”

While the full text of the bill is not yet publicly available, Rep. Beatty said in her press release that the bill would:

  • Forbid creditors from enforcing a debt through
    • Repossession
    • Threat of action and/or wage garnishment
    • Commencing an eviction for nonpayment
    • Disconnection or termination of utility service
  • Prohibit debt collectors from penalizing consumers for nonpayment
  • Require debt collectors to ensure an adequate repayment period once forbearance ends
  • Create a credit facility at the Federal Reserve to make long-term, low-cost loans to debt collectors to cover documented financial losses

A number of these provisions have bee included in other bills that have been introduced in Congress during the coronavirus pandemic.

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