New legislation introduced this week will effectively bar all predatory debt collectors from receiving money from funds received under the federal government’s Paycheck Protection Program (PPP).
The measure has been introduced by Representatives Suzanne Bonamici (D-Ore.) and Marie Newman (D-Ill.). In announcing the proposed legislation, the lawmakers pointed to an analysis conducted by the Washington Post in January 2021. The Post reported several incidents where debt collection companies had harassed consumers for payment on debts after they had received their own financial assistance from federal PPP loans. It was their hope that this legislation will curb these practices and will effectively block predatory debt collection firms from receiving PPP money themselves.
Since it’s inception, the $670 billion Paycheck Protection Program (PPP) has provided forgivable loans for amounts up to $10 million for qualifying small businesses. The purpose behind them was to keep struggling small businesses afloat during the COVID-19 pandemic.
While thousands of businesses have struggled to survive during this time, many debt collection firms have reportedly thrived. Many of them were able to successfully receive aid through the initial set of PPP loans issued, leaving many consumer advocates to question whether debt collection firms should be allowed to receive these funds.
According to the Washington Post study, over 1,700 debt collection agencies received PPP funds, totaling over $520 million in funds received. Even after receiving this money, many of them continued to pursue collection of debts through harassment or other abusive methods.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
