Louisiana House Bill HB122

Louisiana 2016 Regular Session

• Introduced: 2/19/16
• Refer: 2/19/16
• Refer: 3/14/16
• Report Pass: 3/21/16

Caption

Provides relative to the sale of negotiable instruments and related rights

Impact

The implications of HB 122 are significant for the legal landscape in Louisiana, as it modifies the conditions under which debts can be managed and settled. By stipulating that debtors cannot discharge obligations tied to specific financial instruments via assignment, the bill aims to protect the rights of assignees and ensure that debts are honored as intended. This change could potentially lead to greater certainty for creditors in their financial transactions while simultaneously impacting debtors who may seek to negotiate terms involving their litigious rights.

Summary

House Bill 122 aims to amend the Civil Code regarding the sale of negotiable instruments, specifically addressing the treatment of litigious rights. The key change introduced by this bill is that a debtor will not be able to extinguish their obligation when the litigious right arises from the enforcement of a promissory note, mortgage, or other evidence of borrowed money. This amendment alters existing provisions by adding specific exceptions related to financial instruments and obligations, thus clarifying the terms under which such debts can be settled or extinguished by the debtor.

Sentiment

The sentiment surrounding the bill appears to be largely supportive among financial and legal professionals who believe it will enhance the clarity and enforceability of financial obligations. However, there may be concerns from consumer protection advocates and debtors who fear that the bill could limit their options for managing extant debts. The discussion surrounding the bill reflects a commitment to providing a stable framework for financial dealings while also balancing the interests of debtors and creditors.

Contention

While the bill itself may seem straightforward, it raises questions about the balance of power in financial transactions. Critics argue that by reinforcing creditors' rights, the bill could inadvertently disadvantage debtors, particularly in situations involving contested debts. The ongoing discussion around HB 122 showcases the enduring debate over ensuring fair financial practices while protecting the interests of both sides involved in debt transactions.