Merkley-Daines bill would help Oregonians manage and restructure debt

As progress toward reopening slows in Oregon, we anticipate that the COVID-19 pandemic will continue to affect Oregonians for some time to come.

The local and national economic downturn will increase the burden of millions of Americans facing the repayment of record levels of unsecured debt – $1.4 trillion nationwide. These families and small business owners will need help managing and restructuring their debt repayments in the future.

Sen. Jeff Merkley, D-Oregon, and Sen. Steve Daines, R-Montana, are leading a bipartisan effort to provide $700 million in federal support for credit counseling over two years. This support will allow millions of Americans with billions in unsecured debt to work with credit counseling and evaluate debt management options to avoid bankruptcy and debt collectors.

American families who have lost their jobs or been laid off, and small business owners facing massive income cuts, face crippling credit card and medical expenses. Since mid-March, more than 40 million Americans, including more than 300,000 Oregonians, have been unemployed. They are our family and neighbors, many of whom own small businesses in our communities.

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They now risk falling even further behind on their debts, further straining our already faltering economy. Those lucky enough to benefit from temporary forbearance will face a harsh reality when these programs end. There is no doubt that overdue consumer debt will lead to bankruptcies and foreclosures, flooding our courts and weakening our communities.

Creditors are ready and willing to work with Americans to restructure their debt. But many consumers hold credit card and other debt with multiple creditors, and it’s difficult to develop comprehensive solutions without expert advice.

Confused and overwhelmed, these Americans could be vulnerable to scam artists who bombard consumers with empty promises and threaten the important relationship between financial institutions and their customers.

Fortunately, the Merkley-Daines bill would provide essential resources to help these struggling Americans. Their bill would help Americans avoid bankruptcy and restructure existing debt to affordably pay off more billions of dollars in two years, while saving billions in concessions from their creditors.

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Non-profit credit counselors are already working with families in financial difficulty due to COVID-19. Locally, the Consumer Credit Counseling Service of Southern Oregon, a member of the National Foundation for Credit Counseling, is working with other agencies, creditors, banks and regulators on a scalable national program to help consumers facing debt from the shutdown.

The senators’ proposal builds on a successful program that helped American homeowners recover from the mortgage crisis. Federal support has enabled nonprofit counselors to work with millions of homeowners to avoid foreclosure and secure safe, long-lasting loan modifications.

To address the unique challenges presented by the COVID crisis, nonprofit credit counselors can help millions of American families and small businesses properly size their unsecured debt with sustainable lower payments to avoid bankruptcy and collections. .

Oregon can lead the nation through our economic recovery by encouraging broader support from nonprofit credit counseling, setting Oregon families on the path to long-term financial health.

Bill Ihle is Executive Director and CEO of Consumer Credit Counseling Service of Southern Oregon. You can contact him at [email protected]

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