A lot of people are wondering whether collection agencies have to stop trying to collect during the Coronavirus pandemic and state of emergency.

While there is no specific nationwide law prohibiting debt collectors from seeking to collect during the Coronavirus emergency, many debt collectors are not seeking collection right now, at least not as aggressively as before. However, at this time there is nothing stopping a debt collector from calling you or sending you a collection letter.

Numerous states and cities have stopped collection of debts owed to the state or city while the pandemic is in force. For example, the City of Chicago is not seeking to collect overdue fines or fees while the pandemic is ongoing.

There are other states and cities that are also not seeking collection of overdue utilities or other charges. This doesn’t mean that the debt goes away, but it does mean that the creditor will not seek to collect it while the emergency order is in effect. It would make sense that when the emergency ends, the cities and states would begin seeking collection again.

Student Loans

For now, the Department of Education is not charging any interest on federally backed student loans. Most student loans are either federal student loans or private student loans. A federal student loan is one that is backed by the Department of Education or otherwise guaranteed by the Department of Education.

About 90% of student loans are federal student loans. The remaining loans are private student loans that are owed to or guaranteed by a bank or other private lender. While the Department of Education is waiving interest, there is nothing stopping private student lenders from charging interest or otherwise collecting student loans.

The Department of Education has told their student loan servicers not to seek payment on loans until at least September 2020. If you owe federally backed student loans, this means that you will not need to make payments on them until September 2020.

While student loan servicers are not supposed to charge interest or other charges during this period of time, mistakes often happen with them, so it is always a good idea to check your account online to make sure that they are following this rule. There is also nothing to stop you from making student loan payments if you are able to, as these will pay down the principal that you owe.

If you have a mortgage that is backed by Fannie Mae, Freddie Mac, or another government entity, you may be able to get a loan forbearance for at least 60 days, and potentially longer. However, you will need to contact your mortgage servicer to make sure that you qualify and inform them that you have difficulty paying and would like a forbearance.

Mortgages

Currently, servicers are not allowed to require you to provide documentation, but you may be required to state in writing that you are having difficulty making your mortgage payment and would like a forbearance. Mortgage servicers often make mistakes, so it is always smart for you to require everything be in writing, take notes of all your phone calls, and communicate as much as you can via USPS certified mail.

Keep a paper trail so that you can avoid accidental late charges, incorrect terms, or worse. Always be sure to save any statements or other correspondence between you and your mortgage servicer so that if something goes wrong you’re able to prove it and get any inaccuracies fixed.