A debt crisis looms as tenants resort to credit cards to stay afloat

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So far, the effects of tenant debts are not immediately visible. Ongoing eviction moratoriums at the city, state, and now federal levels mean Washington isn’t yet to see widespread images of people being removed from their homes. Furthermore, according to a year-on-year comparison of Crosscut’s court records, there were actually fewer individual bankruptcies in Washington in the past six months than in the same period in 2019.

But because the short-term pain has been moderated slightly, that doesn’t mean it won’t happen eventually.

Scott Kinkley, who practices consumer law in Spokane for the nonprofit Northwest Justice Project, said he was “worried” but not surprised to see the high number of tenants using credit cards.

“The first thing people worry about is a roof over their head, food in their stomach, and utilities,” he said. “If you are desperate, you will use credit.”

The negative impact of these decisions would likely be delayed, he said. Even when borrowers receive letters and phone calls from their banks or lenders, the most serious consequences may not appear for months or even years. “People who default on their credit cards tend to see no litigation consequences for a while,” he said.

In the meantime, the hole tenants are in can easily go deeper. Interest rates will be high, and as your credit crumbles everything from homes to car payments will likely get more expensive.

“Everything costs more when you’re poor and everything costs more when you’re in debt,” says Kinkley.

Dalton Chase Farr took up a position at the Holiday Inn in Yakima earlier this year shortly after leaving the Kitsap Naval Base in Bangor. He thought working for a chain hotel would make it easier for him to travel – especially to Thailand – and possibly get work while on the move.

But after just three weeks and a paycheck, he was fired when Yakima County closed and tourism dried up. He is fighting for unemployment and his account with the State Occupational Safety and Health Agency says he has been approved, but he has still not received anything.

Meanwhile, he said he had amassed a huge amount of debt – up to $ 20,000. It is so much that even if it is paid back from unemployment, it does not cover everything. He is still housed but worries about what will happen if the COVID-related anti-eviction restraint systems go away.

“I’ve dealt with bankruptcy, but that’s not what I want to do,” he said.


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