As the hundreds of thousands of Hurricane Katrina evacuees, and the many more who stayed behind struggle to resume their lives,most are facing another storm surge.
The storm surge will begin tomorrow.
That would be the surge of credit-card and other bills that are coming due.
Let's look at the logistics here, then explore some alternatives.
Many of those who have been displaced will be cut off from mail for a long time to come. So while they will be able to receive assistance checks, they won't get their bills - or for that matter, all the incoming checks they may be due.
Many of those who have been left behind in Katrina-affected communities will get their mail, but find it hard to make a living, and sustain an income. Stores, factories,and other establishments where they may have worked will either be closed, or suffer severe declines in sales because few in these communities will have discretionary income from which to spend on goods and services sold or produced by these establishments.
As a result of these distressed conditions, additional unemployment will be rampant.
Now how will the banks, credit card companies, automobile dealers,and other creditors deal with these cases?
Some say they will defer payments. Given the tokenness of that gesture, plus the bureaucracy and technical challenges involved in implementation of such well-intended measures,that's not enough.
Here's my idea.
Congress should pass a Hurricane Katrina Debtor Relief Act. Such an Act could, and should, help these people by establishing a speedy procedure for certifying the direct, and indirect economic victims of Hurricane Katrina.
Then, retroactive to Sept. 1, there should be a 120-day period in which creditors would be forbidden to engage in any of the following credit and collection practices toward those Hurricane victims thus certified:
1. Prohibit all foreclosures.
2. Prohibit the accrual of any additional interest on credit card balances owed by these people;
3. Establish a "do not call" registry of affected people, and forwarding that registry to creditors and collection agencies. Such businesses and agencies would be prohibited from calling people on this list unless called first.
4. Prohibit the accrual of any past due or overlimit fees on these credit card balances;
5. Prohibit the "aging" of past due credit balances in monthly reports provided by these companies to credit bureaus;
6. Prohibit repossessions of automobiles or other major appliances for the 120-day period;
7. Prohibit cancellation of health, automobile, life, casualty and other insurance due to non payment.
8. Prohibit utility service non-payment interruption by phone, gas, electric, water and Internet access providers.
And finally:
9. Delay implementation of the new Federal Bankruptcy Guidelines past October 17 for at least the next 120 days.
Who's listening? Senator Russ Feingold and Rep. John Conyers have been talking publicly about proposing some sort of financial relief legislation.
The Senate and House will be back in session tomorrow. Contacting either or both of these legislators will be at least as helpful as any donation you can send.
To reach Sen. Feingold's contact page, click this link.
To access Rep. Conyers' contact info,scroll down to the bottom of this page.