The pandemic has brought on widespread economic disruption, caused unprecedented job loss, and forced individuals and families living in or on the edge of poverty to make choices between paying the rent or mortgage and putting food on the table. With tens of thousands of DC residents unemployed and struggling to pay for basic necessities, low-income consumers are falling deeper into debt, simply unable to make payments on consumer loans, medical bills, credit cards, and other consumer debt. Homeowners who were already struggling to make ends meet are falling further behind on their mortgages. The pandemic is fueling a growing debt and housing crisis and widening racial and economic disparities.
Our Consumer Law Unit has been working to stem the tide of these impacts in individual and systemic ways. We successfully advocated with the DC Council for critical consumer protection legislation including a broad moratorium on home foreclosures, and legislation protecting consumers from debt collection lawsuits and garnishment of funds (including stimulus check payments) during the District’s public health emergency. We have collaborated with community partners to conduct large-scale outreach to our client community, set up a debt collection defense hotline to provide coordinated access to free legal assistance, and have been staffing a virtual court-based project to provide access to legal services to homeowners with remote foreclosure hearings.
James Wallace (name changed for confidentiality) was being sued on a credit card debt. Mr. Wallace, a two-time cancer survivor, had many ongoing health issues that prevented him from working and keeping up with his financial obligations. He seeks medical treatment several times a month for immunodeficiency virus, memory loss, and sleep apnea, amongst other illnesses.
Legal Aid’s Consumer Law Attorney, Zenia Laws, represented Mr. Wallace in his debt collection lawsuit. Due to the public health emergency and legislative protections advocated for by Legal Aid and our partners, the case was on a temporary hold – but it continued to loom over him as a source of stress. Fortunately, Zenia was able to convince the debt collector to dismiss its lawsuit because of Mr. Wallace’s medical and financial hardships, giving him peace of mind and more space to focus on his health during an incredibly challenging year.
Diana Tyler (name changed for confidentiality) first contacted Legal Aid several years ago when she learned that her home of more than three decades was about to be sold at a foreclosure auction. Legal Aid attorney Zack Hill filed an emergency motion, and the mortgage company eventually agreed to cancel the auction. With the help of Legal Aid, Ms. Tyler then did a thorough review of her financial situation and made the difficult but necessary decision to sell her house.
Because she sold her house with the help of a real estate agent, rather than going through foreclosure where it likely would have been sold at a significantly depressed value, Ms. Tyler was able to exercise control over the timing and process and recover the substantial equity she had built in her home over the years. She subsequently used that money to buy a condo, which she was able to pay off, eliminating the financial burden of having a mortgage.
Last year, however, a debt collector’s aggressive collection tactics put Ms. Tyler in a new financial bind when approximately $1600 was suddenly garnished from her bank account based on a years-old credit card debt.
“I worked all my life. I was always a worker. I think I could’ve ended up being homeless, I really do.”DIANA TYLER
Ms. Tyler’s money is supposed to be protected from garnishment, as it all comes from Social Security Disability Insurance (SSDI), but she was left with almost nothing in her account and the prospect of not being able to afford groceries or pay her bills. Zack again served as Ms. Tyler’s attorney, advocating for the prompt release of her funds. His efforts were successful, and Ms. Tyler was soon able to access all of her money and received a refund of the related processing fees the bank had charged in connection with the garnishment.