What Happens When the Moratoriums End?

Key Takeaways
  • Moratoriums protect consumers from evictions, foreclosures, and utility shut-offs.
  • Moratoriums are not forgiveness, and the past due balance grows with each missed payment.
  • You must catch up on the account to prevent an eviction or shut off at the end of the moratorium.

Government officials have used moratoriums to protect vulnerable consumers during the pandemic. New laws and executive orders have halted collections, stopped legal action, and prevented service terminations allowing consumers to go months without paying bills with no consequences. The troubling question becomes, what happens when the moratoriums end?

Current Moratoriums in Place

Ban on evictions: For most of 2020 and through June 30, 2021, landlords cannot evict tenants who fail to pay the rent due to the impact of COVID-19. The ban comes from the CDC and applies to tenants across the country. The ban also extends to evictions from properties secured by FHA-insured mortgages. Many states provide additional protections that can further limit a landlord’s ability to evict a tenant.

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Foreclosure relief: Borrowers with federally guaranteed mortgages receive certain protections under the CDC orders. Lenders may not begin foreclosure procedures due to a foreclosure moratorium that expires on June 30, 2021. In addition to the suspension, borrowers can receive a forbearance for up to 18 months, allowing borrowers to miss payments without hurting their credit during the pandemic.

Moratorium on utility shut-offs: Another central area of protection prevents utility shut-offs. At the state level, 14 states have suspensions on utility service terminations. Local ordinances can also prevent companies from cutting off power, gas, and water to consumers who do not pay the bill on time.

What Happens When the Moratoriums End?

Whether the moratoriums end on June 30, 2021, as it currently stands, or government officials extend the protections again, the time will come when the bill comes due. The longer the moratoriums last, the harder it may be for you to catch up on late payments because the amount due grows each month you don’t pay the bill.

Housing eviction ban: The CARES Act provided $17.4 billion in funding to help with housing needs through HUD (Department of Housing and Urban Development). Funds can assist renters, provide housing vouchers, pay for public housing, and provide accommodations for the elderly.

The Consolidated Appropriations Act of 2021 adds another $25 billion to help families with rental assistance.

The latest bill, The American Rescue Plan, includes $21.55 billion in rental assistance, $5 billion for emergency housing vouchers, $750 million for tribal housing, $100 million for rural housing, and 5 billion to help the homeless. The latest bill allows renters to receive help with payments for up to 18 months.

Help with utilities: Delinquent utility bills have mushroomed to approximately $27 billion. With moratoriums on shut-offs ending in many states in March and April 2021, you could now face the challenge of catching up thousands of dollars in delinquent payments. The American Rescue Plan included $4.5 billion in energy assistance distributed by the states.

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If you can’t pay the total amount, utility companies offer repayment plans for up to 12 months, giving you more time to catch up on your account.

Final Thoughts

Moratoriums are not payment forgiveness, and the bill will come due at the end of the payment holiday. If you can afford your rent and utilities, pay your bills rather than taking advantage of the moratoriums. When you face financial hardship, be proactive, and reach out to your landlord or utility provider to discuss options.

State agencies are administering most federal assistance, and you could find help through your local social security or housing agency.

  • Can my landlord evict me?

    The eviction moratorium prevents most evictions due to non-payment of rent for up to 18 months. Each state issues its own rules regarding when a landlord can and cannot evict during the pandemic. Some states only permitevictions for illegal activities. Others will allow a removalfor any other reason, such as breaking a provision in the lease or a holdover (when you stay after the lease term ends).

  • Where can I get help paying utilities and rent?

    Moratoriums currently prevent utility shut-offs in many states. However, the most recent stimulus package included money to states to help consumers pay delinquent rent and utility bills. Contact your government or social services agencies to find local resources.

  • Is there assistance for mortgages beyond a forbearance?

    Recent stimulus packages could allow you to qualify for a forbearance of up to 18 months. Beyond forbearance, state agencies have money to help borrowers who are behind on their mortgage. You can visit cfpb.gov/housing to review your options.