California Senate Bill SB890 Amended / Bill

 BILL NUMBER: SB 890AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 18, 2012 AMENDED IN SENATE MAY 27, 2011 AMENDED IN SENATE MAY 17, 2011 AMENDED IN SENATE MARCH 24, 2011 INTRODUCED BY Senator Leno  (   Coauthors:   Assembly Members   Butler   and Wieckowski  )  FEBRUARY 18, 2011 An act to add Title 1.6C.5 (commencing with Section 1788.50) to Part 4 of Division 3 of the Civil Code, and to amend Sections 700.010, 706.103, 706.104, 706.108, and 706.122 of, and to add  Sections   Section  581.5 to, the Code of Civil Procedure, relating to debt buyers. LEGISLATIVE COUNSEL'S DIGEST SB 890, as amended, Leno. Debt buyers. (1) Existing state and federal law regulate the practice of debt collection. Existing state law prohibits a debt collector from engaging in specified conduct, including the use of threats or causing a telephone to ring repeatedly to annoy the person called. Existing law prohibits a debt collector from obtaining an affirmation from a debtor of a consumer debt that has been discharged in bankruptcy, without clearly and conspicuously disclosing to the debtor, in writing, the fact that the debtor is not legally obligated to make such affirmation. This bill would enact the Fair Debt Buyers Practices Act, which would regulate the activities of a person or entity that has bought consumer debt and the circumstances in which the person may bring suit. The bill would prohibit a debt buyer, as defined, from making any written statement in an attempt to collect a consumer debt unless the debt buyer  has valid evidence in the form of business records   possesses information  that the debt buyer is the sole owner of the specific debt at issue, the  amount of the  debt  balance, as specified  , and the name of the creditor at the time the debt was charged off, among other things. The bill would require the debt buyer to make  this evidence   certain documents  available to the debtor, without charge, upon receipt of a request, within 15 days. The bill would  prohibit a debt buyer from communicating with a debtor in writing without providing a specified notice   require that a specified notice be included with the debt buyer' s first written communication with the debtor  . The bill would require all settlement agreements between a debt buyer and a debtor to be  documented in open court or otherwise  in writing and would require a debt buyer who receives a payment on a debt to provide a receipt or statement containing certain information. The bill would prohibit a debt buyer from initiating a suit to collect a debt if the statute of limitations on the cause of action has expired. The bill would prescribe penalties for a violation of the act and would provide that its provisions may not be waived. The bill would require a debt buyer bringing an action on consumer debt to include certain information in his or her complaint. The bill would prohibit an entry of judgment in favor of a plaintiff debt buyer unless properly authenticated business records relating to the debt and ownership of it, among other things, are properly in evidence, and would permit a court to dismiss a debt buyer's action to collect with prejudice if this information is not provided or if the debt buyer fails to appear or is not prepared on the date scheduled for trial. (2) Existing law establishes a process for the enforcement of money judgments and requires a levying officer to provide certain documents and information to a judgment debtor and to a designated employer in connection with wage garnishment. Existing law permits a process server also to serve an earnings withholding order on an employer and requires that the process server also serve certain documents at this time. Existing law requires an employer who is served with an earnings withholding order to provide certain documents to an employee who is a judgment debtor. This bill would require, in the circumstances described above, that a copy of the form that the judgment debtor may use to make a claim of exemption and a copy of the form used to provide a financial statement also be provided. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Title 1.6C.5 (commencing with Section 1788.50) is added to Part 4 of Division 3 of the Civil Code, to read: TITLE 1.6C.5. Fair Debt Buyers Practices Act 1788.50. (a) As used in this title, "debt buyer" means a person or entity that regularly purchases charged-off consumer loans or consumer credit accounts, or other delinquent consumer debt. "Debt buyer" includes a person acting on behalf of a debt buyer. (b) Terms defined in Title 1.6C (commencing with Section 1788) shall apply to this title. 1788.51. The requirements and remedies of this title are cumulative to those in Title 1.6C (commencing with Section 1788) as well as any other law. 1788.52. (a) A debt buyer shall not make any written statement in an attempt to collect a consumer debt unless the debt buyer has in its possession evidence, in the form of business records, all of the following: (1) That the debt buyer is the sole owner of the specific debt or account at issue. (2) The amount of the debt allegedly owed by the debtor, including an itemized accounting of all post-charge-off fees and charges. (3) The name of the creditor at the time of charge-off. (4) The name and address of the debtor as it appeared on the charge-off creditor's records. (5) The charge-off creditor's account number associated with the debt. (6) If the debt is purchased on or after January 1, 2012, a copy of the contract or other document evidencing the debtor's agreement to the debt or, if the claim is based on debt for which no such signed writing evidencing the original agreement exists, then copies of documents demonstrating that the debt was incurred by the person receiving the written statement. (b) A debt buyer shall provide a copy of the evidence described in subdivision (a) to the debtor, without charge, within 15 calendar days of receipt of a debtor's request for the evidence. A debt buyer shall also provide a copy of the materials described in paragraph (1) or (2) of subdivision (b) of Section 1788.60 to the debtor, without charge, within 10 business days of receipt of the debtor's request for the materials. (c) A debt buyer shall not communicate with a debtor in writing in an attempt to collect a time-barred debt without clearly and conspicuously providing the following written notice in at least 12-point boldface type on the first page of the debt buyer's first communication with the debtor: "BECAUSE OF THE PASSAGE OF TIME, WE MAY NOT SUE IN COURT, OR COMMENCE AN ARBITRATION OR OTHER PROCEEDING, ON DEBT THAT IS BARRED BY A STATUTE OF LIMITATIONS. YOU SHOULD CONSULT AN ATTORNEY, VISIT A LOCAL SELF-HELP CENTER, OR VISIT WWW.COURTINFO.COM/SELFHELP FOR MORE INFORMATION." 1788.54. (a) All settlement agreements between a debt buyer and a debtor shall be in writing. A debt buyer that receives payment on a debt shall provide a receipt or monthly statement to the individual from whom payment is received within 15 calendar days of payment. The receipt or statement shall clearly and conspicuously show the amount and date paid, the name of the entity paid, the current account number, the name of the charge-off creditor, and the account number issued by the charge-off creditor, and the remaining balance owing, if any. (b) If a debt buyer accepts a payment as payment in full or as a full and final compromise of the debt, a final statement that complies with subdivision (a) shall be provided to the debtor within 15 calendar days. 1788.56. A debt buyer shall not bring suit, or initiate an arbitration or other legal proceeding, to collect a consumer debt if the applicable statute of limitations on the debt buyer's claim has expired. 1788.58. In an action brought by a debt buyer on a consumer debt: (a) The plaintiff shall disclose clearly and conspicuously on the face of the complaint that the plaintiff is a debt buyer. (b) The complaint shall include all of the following: (1) A short statement, written in simple language, describing the nature of the underlying debt and the consumer transaction from which it is derived. (2) All of the information set forth in paragraphs (2) to (5), inclusive of subdivision (a) of Section 1788.52. (3) An allegation that the debt buyer is the sole current owner of the debt, and setting forth the names of any and all previous owners of the debt. (4) An allegation that the debt is not barred by the applicable statute of limitations. (c) In an action on a consumer debt, a debt buyer shall attach to the complaint a copy of the contract or other writing evidencing the original debt, signed by the defendant, unless the debt buyer provides a sworn declaration that the documents could not be obtained prior to the time of filing suit. If a claim is based on credit card debt and a signed writing evidencing the original debt does not exist, then copies of any documents generated when the credit card was actually used shall be attached. 1788.60. (a) In an action initiated by a debt buyer, prior to the entry of a judgment against a debtor, including a default judgment, the plaintiff shall clearly and conspicuously disclose to the court that it is a debt buyer and shall provide admissible evidence satisfactory to the court to establish the amount and nature of the debt and the identity of the debtor, including all of the information described in subdivision (b). (b) For the purpose of this section, the only evidence sufficient to establish the amount and nature of the debt shall be properly authenticated business records that the court determines are sufficient to satisfy the requirements of Sections 1271 and 1272 of the Evidence Code. The authenticated business records shall include the following items: (1) A copy of the contract or other writing evidencing the original debt, signed by the defendant. If a claim is based on debt for which a signed writing evidencing the original debt does not exist, then copies of documents demonstrating that the debt was incurred by the defendant. (2) A copy of a writing, including, but not limited to, the bill of sale, establishing that the debt buyer is the sole current owner of the debt and showing from which entity the debt was acquired. If the debt has been sold more than once after being charged off, admissible written evidence shall be provided to establish an unbroken chain of ownership interests. Each writing shall contain the original account number of the debt sold or purchased, which shall be redacted for security purposes in accordance with Rule 1.20 of the California Rules of Court. (3) The account number at time of charge-off. (4) The name of the charge-off creditor. (5) The account balance at the time of charge-off. (6) An itemization of post-charge-off fees and charges claimed to be owed. (7) The date of last payment, if any. (8) The amount of interest claimed and the basis for the interest charged. (9) The alleged date of default. (c) In any action on a consumer debt, if the plaintiff who is a debt buyer seeks a default judgment and has not complied with the requirements of this section, the court shall not enter a default judgment for the plaintiff and may, in its discretion, dismiss the action with or without prejudice. (d) In any action on a consumer debt, a debt buyer shall have the burden of pleading and of proving that the applicable statute of limitations has not expired. Before entering a judgment in the action, the court shall determine on the record that the applicable statute of limitations has not expired. 1788.62. (a) Except as otherwise provided by this section, a debt buyer who violates any provision of this title is liable to the person who suffers the violation in an amount equal to the sum of the following: (1) Any actual damage sustained by the person. (2) The amount established pursuant to either subparagraph (A) or (B): (A) The case of any action by an individual, such additional damages as the court may allow, but not more than two thousand dollars ($2,000) per action. (B) In the case of a class action, the amount for each named plaintiff that could be recovered under subparagraph (A) and an amount that the court may determine for the class, not to exceed the lesser of five hundred thousand dollars ($500,000) or 1 percent of the fair market value of the debt buyer. (3) In the case of any successful action to enforce the foregoing liability, the costs of the action, together with reasonable attorneys' fees as determined by the court. Reasonable attorneys' fees may be awarded to a prevailing debt buyer upon a finding by the court that the action was brought in bad faith and for the purpose of harassment. (b) In determining the amount of liability under paragraph (2) of subdivision (a), the court shall consider, among other relevant factors, the following: (1) In any individual action under subparagraph (A) of paragraph (2) of subdivision (a), the frequency and persistence of noncompliance by the debt buyer, and the nature of the noncompliance. (2) In any class action under subparagraph (A) of paragraph (2) of subdivision (a), the frequency and persistence of noncompliance by the debt buyer, the nature of the noncompliance, the resources of the debt buyer, and the number of persons adversely affected. (c) A debt buyer shall not be held liable in any action brought under this title if the debt buyer shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. (d) An action to enforce any liability created by this title may be brought within two years from the last violation. 1788.64. Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.   SECTION 1.   The Legislature finds and declares the following:   (a) The collection of debt is an appropriate business practice, and most entities involved in the collection of debt act within the requirements of the law, and respect the rights of consumers.   (b) According to the Federal Trade Commission and the Department of Consumer Affairs, the debt collection industry is, however, the source of more consumer inquiries in California than any other industry. A significant source of consumer complaints concerns attempts to collect debt that is not owed, has been discharged, or is impermissible.   (c) Debt collection lawsuits brought by debt buyers have increased sharply in recent years, and this increase has resulted in a significant strain on the state's courts.   (d) Many collection lawsuits brought by some debt buyers are not supported by sufficient documentation to establish the provenance of the alleged debt. In a significant percentage of these lawsuits, defendants never appear, resulting in default judgments where potential defenses to collection efforts are not raised.   (e) To facilitate the collection of debt and ensure the integrity of the debt collection process, reasonable documentation establishing the provenance of purchased debt must be secured before action is taken to collect it. The existence of that documentation will protect consumers, provide needed guidance to courts, and establish clear standards for debt buyers and the collection industry.   SEC. 2.   Title 1.6C.5 (commencing with Section 1788.50) is added to Part 4 of Divis   ion 3 of the   Civil Code   , to read:   TITLE 1.6C.5. Fair Debt Buyers Practices Act 1788.50. (a) As used in this title, "debt buyer" means a person or entity that purchases charged-off consumer loans or consumer credit accounts, or other delinquent consumer debt. (b) "Debt buyer" includes any direct or indirect parent, subsidiary, or other affiliate of the person or entity described in subdivision (a), and any person or entity with an ownership interest in the purchased debt. (c) Terms defined in Title 1.6C (commencing with Section 1788) shall apply to this title. (d) The provisions of this title shall apply to debt buyers on all debt sold or resold on or after July 1, 2013. 1788.52. (a) A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses the following information: (1) That the debt buyer is the sole owner of the debt at issue, or has authority to assert the rights of all owners of the debt. (2) The debt balance at charge off, including an explanation of all post-charge-off fees and charges, and the basis for their imposition. (3) The date of default or the date of the last payment. (4) The name of the creditor at the time of charge off, and the charge-off creditor's account number associated with the debt. (5) The name and address of the debtor as it appeared in the creditor's records at the time of charge off. For debt sold or resold prior to July 1, 2013, the debtor's name and last known address will satisfy the requirements of this paragraph. (6) The names of all persons or entities that purchased the debt after charge off, including the plaintiff debt buyer. (b) A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer has access to, and can produce in accordance with subdivision (c), the following documents: (1) Business records evidencing the information required by paragraphs (1) to (6), inclusive, of subdivision (a). (2) A copy of a contract or other document evidencing the debtor's agreement to the debt. If the claim is based on debt for which no signed contract or agreement exists, a copy of a document provided to the debtor while the account was active, demonstrating that the debt was incurred by the debtor. The most recent monthly statement on a credit account recording a purchase transaction, last payment, or balance transfer shall be deemed sufficient to satisfy this requirement. (c) A debt buyer shall provide the documents identified in subdivision (b) to the debtor without charge within 15 calendar days of receipt of a debtor's written request for information regarding, or proof of, the debt. If the debt buyer cannot provide the documents within 15 calendar days, the debt buyer shall cease collection of the debt until the debt buyer provides the debtor the documentation described in subdivision (b). A debt buyer shall provide an active postal address and an active e-mail address to which such requests can be sent. (d) A debt buyer's first written communication with the debtor shall include the following notice, in 12-point type, on the first page, with the words "VERY IMPORTANT" in bolded print: NOTICE TO CONSUMER DEPENDING ON HOW MUCH TIME HAS PASSED SINCE YOUR DEBT BECAME PAST DUE, YOU MAY HAVE THE ABILITY TO STOP A DEBT COLLECTION LAWSUIT OR OTHER LEGAL ACTION AGAINST YOU. THIS RIGHT IS CALLED A "STATUTE OF LIMITATIONS" DEFENSE. HOWEVER, FAILURE TO PAY YOUR DEBTS MAY NEGATIVELY IMPACT YOUR CREDIT RATING FOR A PERIOD OF UP TO SEVEN YEARS FROM THE DATE WHEN THE DEBT WAS CHARGED OFF OR PLACED FOR COLLECTION. IT IS VERY IMPORTANT THAT YOU RESPOND TO THESE DOCUMENTS. TO GET HELP, YOU CAN CONSULT AN ATTORNEY, VISIT A LOCAL SELF-HELP CENTER, OR VISIT HTTP://WWW.COURTS.CA.GOV/SELFHELP.HTM FOR MORE INFORMATION. (e) In the event of a conflict between the requirements of subdivision (c) and federal law, so that it is impracticable to comply with both, the requirements of federal law shall prevail. 1788.54. (a) All settlement agreements between a debt buyer and a debtor shall be documented in open court or otherwise reduced to writing. A debt buyer that receives payment on a debt shall provide, within 30 calendar days, a receipt or monthly statement, to the individual from whom payment is received. The receipt or statement shall clearly and conspicuously show the amount and date paid, the name of the entity paid, the current account number, the name of the charge-off creditor, the account number issued by the charge-off creditor, and the remaining balance owing, if any. The receipt or statement may be provided electronically, at the debtor's option. (b) A debt buyer that accepts a payment as payment in full, or as a full and final compromise of the debt, shall provide, within 30 calendar days, a final statement that complies with subdivision (a). A debt buyer shall not sell an interest in a resolved debt, or any confidential personal or financial information related to the resolved debt. 1788.56. A debt buyer shall not bring suit or initiate an arbitration or other legal proceeding to collect a consumer debt if the applicable statute of limitations on the debt buyer's claim has expired. 1788.58. In an action brought by a debt buyer on a consumer debt: (a) The complaint shall allege all of the following: (1) That the plaintiff is a debt buyer. (2) The nature of the underlying debt and the consumer transaction or transactions from which it is derived, in a short and plain statement. (3) That the debt buyer is the sole owner of the debt at issue, or has authority to assert the rights of all owners of the debt. (4) The debt balance at charge off, including an explanation of all post-charge-off fees and charges, and the basis for their imposition. (5) The date of default or the date of the last payment. (6) The name of the creditor at the time of charge off, and the charge-off creditor's account number associated with the debt. (7) The name and address of the debtor as they appeared in the creditor's records at the time of charge off. For debt sold or resold prior to July 1, 2013, the debtor's name and last known address will satisfy the requirements of this paragraph. (8) The names of all persons or entities that purchased the debt after charge off, including the plaintiff debt buyer. (9) That the debt buyer has complied with Section 1788.52. (b) The document described in paragraph (2) of subdivision (b) of Section 1788.52, shall be attached to the complaint. (c) The following separate written notice shall be served with the complaint in at least 12-point type, with the words "VERY IMPORTANT" in bolded print: NOTICE TO CONSUMER DEPENDING ON HOW MUCH TIME HAS PASSED SINCE YOUR DEBT BECAME PAST DUE, YOU MAY HAVE THE ABILITY TO STOP A DEBT COLLECTION LAWSUIT OR OTHER LEGAL ACTION AGAINST YOU. THIS RIGHT IS CALLED A "STATUTE OF LIMITATIONS" DEFENSE. HOWEVER, FAILURE TO PAY YOUR DEBTS MAY NEGATIVELY IMPACT YOUR CREDIT RATING FOR A PERIOD OF UP TO SEVEN YEARS FROM THE DATE OF WHEN THE DEBT WAS CHARGED OFF OR PLACED FOR COLLECTION. IT IS VERY IMPORTANT THAT YOU RESPOND TO THESE DOCUMENTS. TO GET HELP, YOU CAN CONSULT AN ATTORNEY, VISIT A LOCAL SELF-HELP CENTER, OR VISIT HTTP://WWW.COURTS.CA.GOV/SELFHELP.HTM FOR MORE INFORMATION. (d) In the event of a conflict between the requirements of subdivision (c) and federal law, so that it is impracticable to comply with both, the requirements of federal law shall prevail. (e) The requirements of this title shall not be deemed to require the disclosure in public records of personal, financial, or medical information, the privacy of which is protected by any state or federal law. 1788.60. (a) In an action initiated by a debt buyer, no default or other judgment may be entered against a debtor unless authenticated business records have been admitted into evidence to establish the facts required to be alleged by paragraphs (3) to (9), inclusive, of subdivision (a) of Section 1788.58. (b) No default or other judgment may be entered against a debtor unless the document described in paragraph (2) of subdivision (a) of Section 1788.52 is admitted into evidence. (c) In any action on a consumer debt, if a debt buyer plaintiff seeks a default judgment and has not complied with the requirements of this title, the court shall not enter a default judgment for the plaintiff and may, in its discretion, dismiss the action. 1788.62. (a) A debt buyer that violates any provision of this title with respect to any person shall be liable to that person in an amount equal to the sum of the following: (1) Any actual damages sustained by that person as a result of the violation, including, but not limited to, the amount of any judgment obtained by the debt buyer as a result of a time-barred suit to collect a debt from that person. (2) Additional damages in an amount as the court may allow, which shall not be less than one hundred dollars ($100) nor greater than one thousand dollars ($1,000). (b) In the case of a class action, a debt buyer that violates any provision of this title shall be liable for any additional damages for each named plaintiff as provided for in paragraph (2) of subdivision (a). If the court finds that the debt buyer engaged in a pattern and practice of violating any provision of this title, the court may award additional damages to the class in an amount not to exceed the lesser of five hundred thousand dollars ($500,000) or 1 percent of the net worth of the debt buyer. (c) (1) In the case of any successful action to enforce liability under this section, the court shall award costs of the action, together with reasonable attorney's fees as determined by the court. (2) Reasonable attorney's fees may be awarded to a prevailing debt buyer upon a finding by the court that the plaintiff's prosecution of the action was not in good faith. (d) In determining the amount of liability under subdivision (b), the court shall consider, among other relevant factors, the frequency and persistence of noncompliance by the debt buyer, the nature of the noncompliance, the resources of the debt buyer, and the number of persons adversely affected. (e) A debt buyer shall have no civil liability under this section if the debt buyer shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adopted to avoid any error. (f) An action to enforce any liability created by this title shall be brought within one year from the last violation. (g) Recovery in an action brought under the Rosenthal Fair Debt Collection Practices Act (Title 1.6C (commencing with Section 1788) or the federal Fair Debt Collection Practices Act (15 U.S.C. Sec. 1692 et seq.) shall preclude recovery for the same acts in an action brought under this title. 1788.64. Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.   SEC. 2.  SEC. 3.  Section 581.5 is added to the Code of Civil Procedure, to read: 581.5. In a case involving consumer debt, as defined in Section 1788.2 of the Civil Code, and as regulated under Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, if the defendant debtor appears for trial on the scheduled trial date, and the plaintiff debt buyer either fails to appear or is not prepared to proceed to trial, and the court does not find a good cause for continuance, the court may, in its discretion, dismiss the action with or without prejudice. Notwithstanding any other law, in this instance, the court may award the defendant debtor's costs of preparing for trial, including, but not limited to, lost wages and transportation expenses.  SEC. 3.   SEC. 4.  Section 700.010 of the Code of Civil Procedure is amended to read: 700.010. (a) At the time of levy pursuant to this article or promptly thereafter, the levying officer shall serve a copy of the following on the judgment debtor: (1) The writ of execution. (2) A notice of levy. (3) If the judgment debtor is a natural person, a copy of the form listing exemptions prepared by the Judicial Council pursuant to subdivision (c) of Section 681.030, the list of exemption amounts published pursuant to subdivision (e) of Section 703.150, a copy of the form that the judgment debtor may use to make a claim of exemption pursuant to Section 703.520, and a copy of the form the judgment debtor may use to provide a financial statement pursuant to Section 703.530. (4) Any affidavit of identity, as defined in Section 680.135, for names of the debtor listed on the writ of execution. (b) Service under this section shall be made personally or by mail.  SEC. 4.   SEC. 5.  Section 706.103 of the Code of Civil Procedure is amended to read: 706.103. (a) The levying officer shall serve upon the designated employer all of the following: (1) The original and one copy of the earnings withholding order. (2) The form for the employer's return. (3) The notice to employee of earnings withholding order. (4) A copy of the form that the judgment debtor may use to make a claim of exemption. (5) A copy of the form the judgment debtor may use to provide a financial statement. (b) At the time the levying officer makes service pursuant to subdivision (a), the levying officer shall provide the employer with a copy of the employer's instructions referred to in Section 706.127. The Judicial Council may adopt rules prescribing the circumstances when compliance with this subdivision is not required. (c) No earnings withholding order shall be served upon the employer after the time specified in subdivision (b) of Section 699.530.  SEC. 5.   SEC. 6.  Section 706.104 of the Code of Civil Procedure is amended to read: 706.104. Any employer who is served with an earnings withholding order shall: (a) Deliver to the judgment debtor a copy of the earnings withholding order, the notice to employee of earnings withholding, a copy of the form that the judgment debtor may use to make a claim of exemption, and a copy of the form the judgment debtor may use to provide a financial statement within 10 days from the date of service. If the judgment debtor is no longer employed by the employer and the employer does not owe the employee any earnings, the employer is not required to make such delivery. The employer is not subject to any civil liability for failure to comply with this subdivision. Nothing in this subdivision limits the power of a court to hold the employer in contempt of court for failure to comply with this subdivision. (b) Complete the employer's return on the form provided by the levying officer and mail it by first-class mail, postage prepaid, to the levying officer within 15 days from the date of service. If the earnings withholding order is ineffective, the employer shall state in the employer's return that the order will not be complied with for this reason and shall return the order to the levying officer with the employer's return.  SEC. 6.   SEC. 7.  Section 706.108 of the Code of Civil Procedure is amended to read: 706.108. (a) If a writ of execution has been issued to the county where the judgment debtor's employer is to be served and the time specified in subdivision (b) of Section 699.530 for levy on property under the writ has not expired, a judgment creditor may deliver an application for issuance of an earnings withholding order to a registered process server who may then issue an earnings withholding order. (b) If the registered process server has issued the earnings withholding order, the registered process server, before serving the earnings withholding order, shall deposit with the levying officer a copy of the writ of execution, the application for issuance of an earnings withholding order, and a copy of the earnings withholding order, and shall pay the fee provided by Section 26750 of the Government Code. (c) A registered process server may serve an earnings withholding order on an employer whether the earnings withholding order was issued by a levying officer or by a registered process server, but no earnings withholding order may be served after the time specified in subdivision (b) of Section 699.530. In performing this function, the registered process server shall serve upon the designated employer all of the following: (1) The original and one copy of the earnings withholding order. (2) The form for the employer's return. (3) The notice to the employee of the earnings withholding order. (4) A copy of the form that the judgment debtor may use to make a claim of exemption. (5) A copy of the form the judgment debtor may use to provide a financial statement. (6) A copy of the employer's instructions referred to in Section 706.127, except as otherwise prescribed in rules adopted by the Judicial Council. (d) Within five court days after service under this section, all of the following shall be filed with the levying officer: (1) The writ of execution, if it is not already in the hands of the levying officer. (2) Proof of service on the employer of the papers listed in subdivision (c). (3) Instructions in writing, as required by the provisions of Section 687.010. (e) If the fee provided by Section 26750 of the Government Code has been paid, the levying officer shall perform all other duties required by this chapter as if the levying officer had served the earnings withholding order. If the registered process server does not comply with subdivisions (b), where applicable, and (d), the service of the earnings withholding order is ineffective and the levying officer is not required to perform any duties under the order and may terminate the order and may release any withheld earnings to the judgment debtor. (f) The fee for services of a registered process server under this section shall be allowed as a recoverable cost pursuant to Section 1033.5.  SEC. 7.   SEC. 8.  Section 706.122 of the Code of Civil Procedure is amended to read: 706.122. The "notice to employee of earnings withholding order" shall contain a statement that informs the employee in simple terms of the nature of a wage garnishment, the right to an exemption, the procedure for claiming an exemption, and any other information the Judicial Council determines would be useful to the employee and appropriate for inclusion in the notice, including all of the following: (a) The named employer has been ordered to withhold from the earnings of the judgment debtor the amounts required to be withheld under Section 706.050, or such other amounts as are specified in the earnings withholding order, and to pay these amounts over to the levying officer for transmittal to the person specified in the order in payment of the judgment described in the order. (b) The manner of computing the amounts required to be withheld pursuant to Section 706.050. (c) The judgment debtor may be able to keep more or all of the judgment debtor's earnings if the judgment debtor proves that the additional earnings are necessary for the support of the judgment debtor or the judgment debtor's family supported in whole or in part by the judgment debtor. (d) If the judgment debtor wishes a court hearing to prove that amounts should not be withheld from the judgment debtor's earnings because they are necessary for the support of the judgment debtor or the judgment debtor's family supported in whole or in part by the judgment debtor, the judgment debtor shall file with the levying officer an original and one copy of the "judgment debtor's claim of exemption" and an original and one copy of the "judgment debtor's financial statement."  SEC. 8.   SEC. 9.  The provisions of this act are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.