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Publication Citation

11 California Law Review Online 222 (2020)


To curb the rapid spread of the coronavirus set to overwhelm the United States' healthcare system, in mid-March 2020, the federal government declared a national emergency. Many states followed suit by implementing shelter-at-home orders and people began social distancing across America. As of this writing, the United States' reaction to the unique and alarming threat of COVID 19 has partially succeeded in slowing the virus's spread. Saving people's lives, however, has come at a severe economic cost. Economic activity plummeted. Unemployment numbers soured to figures not seen since the Great Depression and countless other people saw their income disappear.

Americans' economic anxiety has understandably spiked. With no end in sight to the crisis, people have feared they would be unable to meet their basic expenses, such as buying food and paying for utilities. Those who have lost their jobs also now have had to find money to pay for health insurance. And car, house, and rent payments would be coming due soon and then again every month, regardless of whether people still had income. These worries were more acute among minority communities and lower-income households, who already faced concerns about their financial stability before the crisis.

People's anxieties about money have necessarily included what might happen if they could not cover already outstanding debts. In addition to auto loans and mortgages, debts like credit cards, medical bills, student loans, and past-due taxes are high on the minds of many households. If people defaulted on any of these debts, creditors and debt collectors could garnish their bank accounts and wages, repossess their cars, and foreclose on their homes and other property. The nearly 70 million Americans with debts already in collection are facing heightened anxiety about their inability to pay. As with people's worries about money generally, these fears continue to be more acute for communities of color. Black and Latinx Americans are sued by creditors and debt collectors more often than others, and lawsuits against them are more likely to end with default judgments that lead to garnishments. They also are subject to heightened policing that saddles them with parking tickets, court fees, and other government debts that force them into modem-day debtors' prison.

The coronavirus pandemic is set to metastasize into a debt collection pandemic. The federal government can and should do something to put a halt to debt collection until people can get back to work and earn money to pay their debts. Yet it has done nothing to help people deal with their debts. Instead, states have tried to solve issues with debt collection in a myriad of patchwork and inconsistent ways. These efforts help some people and are worthwhile. But more efficient and comprehensive solutions exist. Because American families' finances are unlikely to recover as soon as the crisis ends, debt collection brought by the COVID-19 crisis also will not dissipate anytime soon. Even after the crisis ends, the need to implement comprehensive, longer-lasting solutions will remain. As we detail below, these solutions largely fall on the shoulders of the federal government, though state attorney generals have the necessary power to help people effectively. If the government continues on its present course, a debt collection pandemic will follow the coronavirus pandemic.