Bill Summary:

The bill establishes a 180-day prohibition on any prohibits a judgment creditor from initiating a new extraordinary debt collection actions action from the effective date of the bill through November 1, 2020, except in accordance with the requirements of the bill. An extraordinary collection action is defined as an action in the nature of a garnishment, attachment, levy, or execution to collect or enforce a judgment on a debt as defined under the "Colorado Fair Debt Collection Practices Act" (FDCPA). Before initiating an extraordinary collection action, the judgment creditor must send a notice to the judgment debtor explaining that the judgment debtor can temporarily suspend the extraordinary collection action if the debtor is facing financial hardship as a result of the COVID-19 emergency. To exercise this right, the debtor is required to notify the judgment creditor that the debtor is experiencing hardship as a result of the crisis. The judgment debtor is not required to provide additional documentation to the judgment creditor. The use of an extraordinary collection action during the period of the prohibition constitutes an unfair and unconscionable means of collecting a debt under the FDCPA. The administrator of the "Uniform Consumer Credit Code" (administrator) is authorized to issue an order extending the prohibition for up to an additional 180 days through February 1, 2021, if the administrator finds that the extension is necessary to preserve the resources of state and local agencies or to protect the residents of Colorado from economic hardship as a result of the disaster emergency caused by COVID-19. The bill amends provisions concerning property that From the effective date of the bill through February 1, 2021, up to $4,000 cumulative in a depository account or accounts in the debtor's name is exempt from levy and sale under a writ of attachment or execution. as follows: The value of household goods that are exempt is increased from $3,000 to $6,000; The value of a motor vehicle that is exempt is increased from $7,500 to $15,000; The value of a motor vehicle kept and used by an elderly or disabled debtor that is exempt is increased from $12,500 to $20,000; and An exemption for up to $7,000 in a depository account in the name of the debtor is added. In addition, the formulas for determining the amount of earnings subject to garnishment are amended to increase the amount of a debtor's earnings that are exempt. An attempt to collect amounts in excess of what is permitted under statutes limiting garnishment, attachment, and execution is an unfair or unconscionable debt collection practice for purposes of the FDCPA. (Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.) (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

CEA Position Rationale: CEA supports social and economic protections for those who are out of work, in debt, or impacted by economic and pandemic crises.

Legislative Priorities: Prioritize Working Families and Union Values, Dismantle Inequitable and Racist Structures 

Tier: 3