AVOIDING Repos and Debt Collectors in the Time of COVID-19: Q and A – California
Can they still repo my car or come after me for debts while we are under lockdown?
It is unclear whether a vehicle repossession is in violation of a cease business order, and also whether the seizure in these conditions should be considered a breach of the peace, particularly if the repossession occurs while the debtor or others are present. IMPORTANT FACT: There are some auto lenders taking VOLUNTARY actions. Reputable auto lenders are offering individual programs to assist borrowers who cannot make their car payment because of the COVID-19 crisis. Most of these are doing so only when the consumer contacts the lender directly. It is important that you immediately contact your lender to request assistance. Lenders are under significant governmental, media and practical pressure to cooperate with impacted consumers to prevent them from defaulting on their loan, losing their automobile or suffering credit report damage. Importantly, the COVID-19, or CARES Act, passed by Congress, prohibits negative credit reporting for consumers who receive a waiver, deferral or other relief from their lender. For example, if you request to skip three monthly payments (90-day deferral), and the lender agrees, as most will, the lender and credit bureaus are not allowed to report that deferral as a negative or derogatory event or payment status. It cannot harm your credit score. However, if you do not contact the lender and confirm its agreement, the missed payments may hurt your credit. Different lenders are offering various relief for borrowers experiencing trouble with making loan payments. Some lenders are open about the relief, detailing it on their webpage, while others provide you details on a “case-by-case” basis when you contact the lender.
What help can I get about my car payments?
There are a variety of types of help your lender may VOLUNTARILY provide:
1.Payment deferrals. The lender allows you to miss (usually between 2 and 4) payments without a late charge or credit damage. With a deferral, you won’t have to make a payment until your extension period ends. After the extension period ends, you resume making your regularly-scheduled auto payments, and your contract will be extended by the number of months your payment was deferred. However, your loan will still accrue interest.
2. Payment reductions. You may ask your lender to allow you to make smaller payments for a fixed number of months.
3. Waive late fees. You may ask the lender to allow you to pay late, but without incurring any late charge.
4. Lease extensions. If you lease an automobile, and your lease is about to end, you may ask your lender to extend the lease.
5. Here is a GREAT link to finding your lender and getting help: https://consumer.law/autoloans.aspx
What about my government aid from CARES or other similar pandemic aid?
California Gov. Gavin Newsom signed an executive order to exempt Coronavirus Aid, Relief, and Economic Security (CARES) Act payments and any other federal, state or local government financial assistance made available to individuals in express response to the COVID-19 pandemic from any attachment, levy, execution, or garnishment unless in connection with any action for, or any judgment awarding, any child support, spousal support, or family support, or any criminal restitution payable to victims.
What about collection calls?
In short, although non-essential businesses, including collection agencies, must close brick-and-mortar operations, remote work, can continue—meaning that businesses may continue to operate with their staff telecommuting. As a result, collections operations in California may continue with staff working remotely, from their place of residence, but agencies should be mindful of the challenges that telecommuting may impose under other state and federal laws, e.g., the FDCPA (for all third-party collectors), HIPAA (for medical debt collectors), and the California Consumer Privacy Act (for those subject to it).