It was clear from the stunning news footage and other coverage that Hurricane Ian and Hurricane Fiona caused enormous physical damage to their communities. Houses were leveled, businesses were left in rubble, and streets became rivers. But, as people lose their homes and jobs or have to wait until insurance checks arrive, the bills somehow still come on time. And the resulting financial struggles may continue long after the news crews have departed. That’s why 26 organizations—from consumer advocacy groups to construction associations—joined forces to ask for the hurricane-related debt to be omitted on consumers’ credit reports.
In a joint letter sent to the heads of seven federal offices, the organizations made the case that consumers impacted by the recent hurricanes should not also suffer from related damage to their credit reports and credit scores.
Currently, lenders have the option to put a natural disaster code (AW) on accounts, but in their letter, the organizations say that lenders aren’t consistent enough in complying with this practice. Further, even when it is followed, it doesn’t sufficiently protect a consumer’s credit score.
Therefore, the signatory organizations proposed that the federal government actively discourage lenders and vendors from reporting negative information to the three nationwide consumer reporting bureaus (Equifax, Experian, and TransUnion) for those living within designated areas as presidentially-declared disaster zones.
If that was unacceptable, the organizations argued that the current reporting exemptions implemented for the Covid pandemic relief also apply to the hurricane victims—so lenders would keep the same reporting status for any who received a hurricane-related accommodation (e.g., a forbearance or deferral).
While the outcome of the proposals is unclear, it’s a reminder that those impacted by natural disasters can cause more financial harm than what meets the eye. And those hidden effects may also devastate a family’s financial well-being.
That’s why you should contact an attorney at Credit Report Law Group who represents clients like you. They can also help end debt collection harassment, work on debt defense, and help you with credit repair. If you have any issues with credit-related concerns, talk to a lawyer who can help you repair your record and obtain compensation for any damages you sustained, so you can move on and rebuild your life in the best way possible.