Utah House Bill HB0325

Utah 2023 Regular Session

• Introduced: 1/31/23
• Failed: 3/3/23

Caption

Court Debt Collection Amendments

Impact

The legislation aims to provide better financial relief for low-income individuals by allowing them to retain a larger portion of their earnings. By modifying the garnishment limits and requirements for notification from creditors, the bill can enhance transparency and assure that debtors are aware of their financial responsibilities. It is anticipated that the bill will help mitigate the adverse effects of aggressive debt collection practices on vulnerable populations who may struggle to meet their obligations without sacrificing essential living expenses.

Summary

House Bill 325, titled Court Debt Collection Amendments, introduces several changes regarding judgments that require payment of money in Utah. Key provisions include adjustments to the amount of wages that can be garnished based on an individual's annual income relative to the federal poverty level. The bill lowers the maximum garnishment percentage for individuals earning below specific thresholds, setting it at 10% for those with incomes at or below 200% of the poverty level, and raising it up to 25% for higher incomes. Additionally, it stipulates that a judgment creditor must provide quarterly statements to judgment debtors detailing their payment history and outstanding balances.

Contention

Despite its intended benefits, HB 325 has faced scrutiny from various stakeholders. Critics argue that while the bill may provide some relief to debtors, it could also limit the ability of creditors to recover owed debts in a timely manner. The required quarterly statements might impose additional administrative burdens on creditors, potentially leading to increased costs that could ultimately be passed on to consumers. Some stakeholders are concerned about the balance between protecting debtors and ensuring creditors are able to enforce their rights effectively.