What Collections did the Maryland State of Emergency Stop?
Governor Hogan first proclaimed a State of Emergency on March 5, 2020, and it was renewed on March 17, April 10, May 6, June 3, July 1, July 31, August 10, September 8, October 6, October 29, November 25, and December 23, 2020, and January 21, February 19, March 18, April 16, May 12 and June 12, 2021. Order 20-12-17-02 stopped residential foreclosures, evictions, repossessions, and commercial evictions. Also, order 20-04-29-03 stopped the garnishment of CARES Act Rebates, and order 20-03-15-01 stopped the garnishment of the American Rescue Plan Rebates. The end of the COVID-19 state of emergency in Maryland will start to end beginning on July 1, 2021.
What Federal Protections Do I Have?
On February 16, 2021, President Biden extended the federal moratorium on evictions and foreclosures through June 30, 2021, after many other extensions. This federal moratorium stopped foreclosures for federally-backed loans and conventional loans. However, almost exactly coinciding with the end of the COVID-19 state of emergency in Maryland, these moratoriums end June 30, 2021, paving the way for mortgage lenders to foreclose.
When Will Collections Begin Again?
The end of the COVID-19 state of emergency in Maryland is an important step to return to normalcy, but it has many repercussions that will affect many people who couldn’t pay their rent, mortgage payments and car payments.
Effective July 1, 2021, creditors can garnish CARES Act Rebates and American Rescue Plan Rebates. Previously, a creditor like a credit card company was not able to take these rebates out of Marylander’s bank accounts. However, now these rebates can be seized by creditors to apply towards judgments. This could be thousands of dollars that can now be taken by creditors.
Collections such as residential foreclosures, evictions, repossessions, and commercial evictions are subject to a 45-day grace period, and therefore these collections are on hold until August 15, 2021. After August 15, 2021, creditors can begin sending Notices of Intent to Foreclose for new foreclosures, and continue foreclosure proceedings that were on hold when the pandemic started. Creditors can repossess cars, and landlords can start evicting people who haven’t been able to pay rent during the pandemic. This, coupled with the end of additional pandemic unemployment benefits of $300.00 a week, is very likely to cause many Marylanders to seek bankruptcy protection to keep their homes and cars.
What Can I Do Today if I Haven’t Made My Rent, Mortgage, or Car Payments During the Pandemic?
There are a few options you can take if you have not made your mortgage payments during the pandemic. First, you can apply for a mortgage forbearance by June 30, 2021 for HUD/FHA, USDA, or VA backed loans, which is a temporary band-aid allowing people to skip mortgage payments from 6 to 12 months without negative consequences. Fannie Mae and Freddie Mac backed loans currently do not have a deadline to apply for a forbearance. The risk with mortgage forbearance is that eventually, you will have to come up with a solution with your lender to address the missed mortgage payments.
Next, you could ask for a loan modification from your lender. Currently, there is no Federal law that requires lenders to accept a loan modification, and therefore loan modifications of many loans are subject to the whims of lenders.
Finally, bankruptcy can be a great option to address these missed payments. Some of the advantages of bankruptcy are that once filed, you are protected from collections because of the automatic stay. This means that foreclosures, evictions, and repossessions can all be stopped. Next, Chapter 13 bankruptcy allows you to pay back missed payments over time, instead of having to pay thousands of dollars all at once. You can also obtain a loan modification during a Chapter 13 bankruptcy.
If you are behind on your mortgage, car payments, or rent, and are not sure what to do, talk to an experienced bankruptcy attorney about your options BEFORE you are faced with a foreclosure, eviction, or repossessions so it’s not too late. Steiner Law Group helps Marylanders save their homes, apartments, and cars through bankruptcy. Schedule a FREE consultation online today or contact us at (410) 670-7060.