Pause on Veteran Debt Collection

Veterans, like many other Americans, are struggling with debt during the coronavirus pandemic. According to a recent article in Military.com, President Biden announced that he has asked the Department of Veterans Affairs to pause debt collection from veterans in an executive order. That executive order, according to the article, “will help approximately 2 million veterans [to] maintain their financial footing” during this difficult period for many veterans across the country. The pause on debt collections applies to “federal collections on overpayments and debts.” If you are a veteran, it is important to understand how the executive order benefits you, and when those benefits may come to an end.

Executive Order to Help Struggling Veterans During the Pandemic

During the COVID-19 pandemic, people across the U.S. are struggling with job loss and medical debt due to COVID-19 infections. Veterans, too, are struggling. In the executive order signed last month, President Biden did the following to help Americans who are struggling with debt:

  • Asked states to “expand and extend federal nutrition assistance programs”;
  • Improve delivery of COVID-19 relief payments through the Treasury Department; and
  • Prevent workers from losing unemployment benefits if they do not take a new job that would unreasonably put them as risk of a COVID-19 infection.

In terms of providing relief to veterans, Rep. Chris Pappas emphasized the importance of the order: “Fair too often, veterans face unexpected debt collection from the VA, some due to overpayments that were through no fault of their own . . . [T]his Executive Order will provide the relief so many need and ensure that our veterans can focus on their physical and financial health during these trying times.” Yet the precise length of the suspension on debt collection for veterans is not yet clear.

Veterans and Other Americans Have Protections Under the FDCPA

Beyond executive orders that pause certain types of debt collection in the U.S., it is important for Americans to know that they also have protections as consumers under the Fair Debt Collection Practices Act (FDCPA). The FDCPA limits the time and place in which creditors and debt collection companies can contact debtors, and generally prohibits debt collectors from using any type of abusive, unfair, or deceptive debt collection practices.

Seeking Options to Manage Debt

When debt collection starts up again for veterans, or if you are not a veteran and are being inundated with contact by debt collectors, you may have options to manage your debt. Depending upon your financial situation, you may be eligible to file for Chapter 7 or Chapter 13 bankruptcy. Both types of bankruptcy come with the automatic stay, which prevents debt collectors from taking any further action once you have filed for bankruptcy.

Contact an Oak Park Consumer Protection Lawyer

If you are struggling with debt, and if you feel overwhelmed by frequent contact from debt collectors, one of our experienced Oak Park consumer protection attorneys can speak with you about your options. You have rights under the FDCPA, and you also may be eligible to seek bankruptcy protection. Contact the Emerson Law Firm to learn more about how we can help.



See Related Blog Posts:

Can I Discharge COVID-19 Medical Debt in Bankruptcy?

Will I Have to Turn Over My Cell Phone in a Chapter 7 Bankruptcy?

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