Bill > SB706

This bill addresses regulations surrounding charged-off consumer debts by establishing new restrictions on debt collection and sales. Specifically, the bill prohibits a charged-off consumer debt from being sold or assigned more than one year after it is charged off, and requires the original charge-off creditor to notify the consumer when the debt is sold to a debt buyer. The bill also limits the timeframe during which legal action can be taken to collect such debts, preventing actions to recover charged-off consumer debt two years after a default notice or 90 days after the debt is charged off. For debt buyers specifically, the bill further restricts their ability to bring legal action to recover a charged-off debt, allowing them only one year from the date of charge-off to do so. A "charged-off debt" typically refers to a debt that a creditor has deemed unlikely to be collected and has written off as a loss for accounting purposes, but which still legally remains collectible. These provisions aim to provide additional consumer protections by limiting the duration and transferability of old consumer debts, potentially reducing the likelihood of consumers being pursued for long-standing or repeatedly sold debt obligations.

Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB706