COVID-19: States Impose Restrictions and Guidelines on Debt Collection Practices

Updated on Author: Sergei Lemberg

Updated on Author: Sergei Lemberg

The rapid spread of COVID-19 has left millions of American families and businesses facing difficult and unprecedented financial situations. First-time U.S. unemployment claims have hovered above 800,000 every week since the U.S. economy shut down in March. Americans hit hardest by the pandemic are also members of the same populations that debt collectors tend to target, including low-income individuals, people of color, immigrants, and young people.

Debt collectors may even act more aggressively during the pandemic – targeting and harassing Americans who are financially vulnerable. According to the Los Angeles Times, consumer advocates have said that debt collectors have grown increasingly aggressive as stay-at-home orders have made it easier for them to contact and sometimes harass people who owe debts.

Although the federal government sent stimulus checks and enacted protections against evictions, foreclosures, and federal student loans under the CARES Act, the seizure of wages for consumer debts that are not federal or state related continued. Only a few states issued executive orders protecting the government’s stimulus checks from garnishment.

Some States Pass Restrictions on Debt Collection Practices

No federal mandate has been passed directing debt collectors on what to do during the pandemic. Some states – to protect consumers from deceptive debt collection practices – have successfully (and unsuccessfully) passed temporary restrictions, on an emergency basis, about what debt collectors can and cannot do. Other states have issued temporary guidance geared toward financial institutions and lending agencies.


In Massachusetts, Attorney General Maura Healey filed an emergency regulation restricting creditors from engaging in methods of debt collection that “require people to leave their homes or have in-person contact, including filing new lawsuits against Massachusetts consumers, visiting their homes or places of work, or repossessing their cars, among other protections.” The restriction applied to telephone calls but not the use of text messages or email to communicate with a debtor.

Attorney General Healey’s regulation was short lived when major debt collection trade organization ACA International filed an action challenging the regulation as unlawful. The Court agreed and found the regulation to be unconstitutional and in violation of the First Amendment.

District of Columbia

D.C. Mayor Muriel Bowser and the District of Columbia City Council passed an emergency COVID-19 bill that significantly restricts debt collection activity. The COVID-19 Response Supplemental Emergency Amendment Act of 2020 says that no creditor or debt collector shall, with respect to any debt:

  • “Initiate, file, or threaten to file any new collection lawsuit;
  • Initiate, threaten to initiate, or act upon any statutory remedy for the garnishment, seizure, attachment, or withholding of wages, earnings, property, or funds for the payment of a debt to a creditor;
  • Initiate threaten to initiate, or act upon any statutory remedy for the repossession of any vehicle, provided that creditors or debt collectors may accept collateral that is voluntarily surrendered.”

The bill also temporarily prevents debt collectors from initiating communication with a debtor in any written or electronic form, including email or text message – contrasting with Massachusetts’s regulation prohibiting only telephone communications. The regulation still remains in effect as of October. The emergency order was recently extended by D.C. Mayor Muriel Bowser to last through December 31, 2020.


In Nevada, Governor Steve Sisolak mandated in March as part of a state-wide shutdown that collection agencies were deemed a “non-essential” business and those holding a license or certificate and located out-of-state must halt collection efforts. The regulation expired in early June.

New York

New York Governor Andrew Cuomo and Attorney General Letita James issued an order to halt the collection of medical and student debt owed to the state of New York. The order was recently renewed for the seventh time for an additional 30-day period.

Additionally, the Office of the Attorney General (OAG) is accepting applications for all other types of debt owed to the state of New York and referred to OAG for collection.

“By again renewing the suspension of state student and medical debt collection referred to my office, we are helping to ease the burden faced by so many individuals and families across our state. I will continue to do everything in my power to protect the safety and financial wellbeing of New Yorkers, as we continue to recover and rebuild from the economic fallout of this crisis,” said Attorney General James in a press release.


In March, the state of Louisiana issued a statewide public health emergency because of COVID-19. Under Louisiana’s Do Not Call Program General Order, upon declaration of a state of emergency by the governor, telephonic solicitation is prohibited, which has historically meant in Louisiana that debt collectors must temporarily cease collection efforts. However, the emergency moratorium on debt collection is not being enforced due to the absence of a directive from the Governor’s Office of Homeland Security and Emergency Preparedness, according to the DNC Program Manager.

The mandatory prohibition on solicitation was enforced when the Governor declared a state of emergency for Hurricane Laura and Delta this year.

Some States Issue Guidance for Debt Collectors


In Arizona, no official mandates have been put in place. However, Attorney General Mark Brnovich issued a letter in March urging in-state financial and lending institutions to waive payments on loans up to 90 days. In the letter, Brnovich also asked all mortgage services and mortgage lending institutions to “cease all foreclosures and evictions for at least 90 days.”


Minnesota Commission of Commerce Steve Kelley issued temporary regulatory guidance in April stating that individual debt collectors should be working from home temporarily to protect themselves and others. The guidance permitted debt collectors to work from home as long as the following criteria are met:

  • “The activity is conducted from the home location of an individual working on behalf of a Minnesota licensee;
  • The individual is working from home due to a reason relating to the COVID-19 outbreak and has informed the licensee of such reason.
  • None of the activity will be conducted in person with members of the public from the home location; and
  • The licensee shall, at all times, exercise supervision of the activity being performed at the home office and ensure that appropriate safeguards and controls are in place to protect consumer information and data.”

FAQs about Debt Collection & COVID-19

  1. Are stimulus checks protected from wage garnishment?

    The CARES Act does not explicitly state that stimulus payments are exempt from garnishment. Only a few states, like Massachusetts, have issued executive orders to stop garnishment orders. Some local court system also has determined they will not accept requests from debt collectors. It is important to review your state laws and determine if your state or local government has issued emergency orders to stop all or some garnishment orders.

  2. What are some wage garnishment exemptions? How can I file a Claim of Exemption?

    Wage garnishment exemptions prevents creditors from garnishing certain kinds of income or more than a certain amount of your wages. Each state has different exemption laws to protect your wages. Some types of wages that are generally fully exempt include: social security, disability, retirement, child support, and alimony.

    Wages are subject to garnishment unless you claim an exemption. To do so, you must file a claim of exemption by filling a document with the court that issued the garnishment order. In the form, you must explain why or all of the wages the creditor wants your employer to garnish should be exempt from being taken. You must file the completed document with the court office where the garnishment originated.

  3. Can a debt collector contact anyone else about my debt?

    A debt collector can’t discuss your debt with anyone but you or your spouse, or an individual who is associated with your debt. A collector is permitted to call other people, such as your relatives, to find out contact information, such as your address, your phone number, and where you work.

  4. Are there limits on when a debt collector can call?

    The FDCPA prevents debt collectors from calling at “any unusual time or place or at a time or place known or which should be known to be inconvenient to the consumer.” The FTC says, “Depending on the circumstances, contacting survivors about a debt shortly after the debtor dies may be unusual, inconvenient, or both.” In other words, if a debt collector repeatedly calls a family member in the midst of bereavement, it could be a violation of the FDCPA.

  5. How do I get a debt collector to stop calling?

    You must send a cease and desist letter to the collector stating that you do not want the collector to contact you again. Make sure to keep a copy of the letter for your records. Once the collector gets your letter, he cannot contact you again except to confirm that there will be no further contact or that he or the creditor plans to take a specific action, like filing a lawsuit to collect the debt. The Consumer Financial Protection Bureau provides sample letters to help if you’re experiencing common problems with debt collectors.

  6. What will the process look like if I file with Lemberg Law?

    You can call us at 475-277-2200 or use our case evaluation form to receive a free, no-obligation consultation from our experienced legal team. If your case is accepted, we work toward a settlement or take the responsible party to court. If we win, you receive the compensation you deserve. If we don’t prevail in the case, we cover the tab for you.

Sergei Lemberg

About the Author:

Sergei Lemberg is a lawyer whose practice focuses on consumer law, class actions and personal injury litigation. He has been repeatedly recognized as the “most active consumer attorney” in the country. In 2020, Mr. Lemberg represented Noah Duguid in the United States Supreme Court in the case entitled Duguid v. Facebook. He is the author of Defanging Debt Collectors, a book that teaches consumers how to battle debt collectors and win.

See more posts from Sergei Lemberg

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