Threats of Jail and Fines for non-court authorized Collections, Foreclosure and Repossession Actions
While a bipartisan temporary debt ceiling agreement was made last week, the Federal Government is still at risk of a shutdown in December. As the result, some in congress apparently believe that federal workers deserve special enhanced protections from foreclosures, repossessions and adverse credit reporting should they fail to raise it again.
On September 30,2021, Democrat Congressman Derek Kilmer of Washington state introduced H.R. 5456, The “Federal Employees Civil Relief Act” to the Committee on Oversight and Reform, the Committees on Financial Services, Ways and Means, the Judiciary, Education and Labor, and House Administration. The bill is aimed at providing “temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of Federal workers during a shutdown.”
Within it’s provisions below are some of the limitations on a creditors rights during an affected period if this bill were to become law.
Anticipatory Relief – A Federal worker who is furloughed or required to work without pay during a shutdown may apply to a court for a temporary stay, postponement, or suspension with respect to any payment of rent, mortgage, tax, fine, penalty, insurance premium, student loan repayment, or other civil obligation or liability that the Federal worker or individual, as applicable, owes or would owe during the duration of the shutdown.
Mortgage Protection and Foreclosures – Misdemeanor—A person that knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited under subsection (c), or that knowingly attempts to make or cause to be made a sale, foreclosure, or seizure of property that is prohibited under that subsection, shall be fined as provided in title 18, United States Code, or imprisoned for not more than 1 year, or both.
Liens – A loan that a Federal worker has obtained with respect to a motor vehicle. (2) LIMITATION ON FORECLOSURE OR ENFORCEMENT—A person holding a lien on the property or effects of a Federal worker may not, during a covered period, foreclose on or enforce that lien without the order of a court that was issued before the date on which that foreclosure or enforcement occurs. Misdemeanor—A person that knowingly takes an action that violates this section, or attempts to take an action that violates this section, shall be fined as provided in title 18, United States Code, or imprisoned for not more than 1 year, or both.
Insurance Protection—Without the order of a court, a covered insurance policy shall not lapse or otherwise terminate or be forfeited because a Federal worker does not pay a premium, or interest or indebtedness on a premium, under the policy that is due during a covered period with respect to a shutdown.
This bill has not yet been introduced or brought to the floor for vote. Should it pass, it would provide a level of protections to federal employees and contractors similar to those given service members in section 101 of the Servicemembers Civil Relief Act (50 U.S.C. 3911) in the event of a government shutdown.
Servicemembers Civil Relief Act – SCRA – (50 U.S.C. 3911)
Bill proposes SCRA like credit protections for federal workers
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