A number of bills are moving through the state legislature in California, including one that would require commercial collectors to obtain the same licenses as consumer collectors, and one that would create a 12-month look-back period for courts to review funds paid to judgment creditors which could create chaos with respect to the order in which judgments are paid out.
AB 2837, introduced by Assembly Member Rebecca Bauer-Kahan, would place a number of new restrictions on creditors who have obtained judgments for unpaid debts from consumers. The bill has been passed in the Assembly and is currently making its way through the state Senate. The California Association of Collectors has been working to amend the bill, but they are being met with strong resistance from the bill’s proponents in the legislature.
The bill would give the courts the power to order the return of any property that was exempt without the consumer needing to file a claim. From the CAC:
- “… reinstating the judgment could put the judgment creditor behind other judgment creditors in regards to abstracts of judgments (as the abstract would have to be re-recorded) or another judgment creditor could be receiving funds from a wage garnishment, requiring the judgment creditor in question to wait until the second judgment creditor has been satisfied.”
Meanwhile, SB 1286 has passed the state Senate and is now working its way through the Assembly. It would, essentially, start treating the collection of commercial debts in California the same as consumer debts, requiring commercial collectors to obtain licenses while also making it a crime to “to send a communication that simulates legal or judicial process or that gives the appearance of being authorized, issued, or approved by a governmental agency or attorney if it is not.”
