Consumer Debt Collections, the Pandemic, and the “Return to Normal”: Telling a More In-Depth Story

An extensively researched, detailed story by Amy DiPierro (published as a collaboration between Stanford University’s Big Local News and the nonprofit Bay City News Foundation) provides critically-needed context and explanation for the steep decline in consumer collections lawsuits during the first phase of the COVID-19 pandemic, the exceptions to that decline, and the extent to which collections have come roaring back in 2021. Featuring extensive comment from debtors, creditors and debt buyers, and attorneys including BayLegal’s Consumer Practice Regional Counsel Noah Zinner and former BayLegal consumer attorney Claire Raba (now a clinical teaching fellow at the UC Irvine School of Law), the story gives us a deeper look into the early contraction and steep new expansion of debt collections during the pandemic, and their impact on low-income consumers. In Zinner’s words:

It’s not so much that they didn’t want to sue people, it’s that they didn’t want to be seen as suing people in the early days of a pandemic. Even though the financial hardship has not ended in a lot of our communities and has been exacerbated by all the unpaid rent and other bills, medical bills, whatever it may be, these same companies are showing that they have no problem with going after people aggressively now.

Along the way, DiPierro’s investigation of consumer debt provides essential historical, social and financial context, including an overview of the financial and legal discrimination behind the racial wealth gap underlying the huge, present-day racial inequities in the impact of consumer and debt and debt collections on consumers of color when compared with white consumers. The story also touches on the steeply uneven playing field in access to legal services and representation between debtors and creditors, and implicitly makes a strong case for the necessity of free civil legal aid to low-income consumers.

For friends of BayLegal interested in understanding the issues facing consumers during the pandemic along with their deeper context, this story is a must-read.