Relating to a consumer debt owed by certain military personnel called to active duty.
If enacted, HB 342 will amend Chapter 392 of the Finance Code to create a mechanism for the deferred collection of consumer debts. This will establish formal protections for service members, preventing creditors from pursuing debt collection efforts while they are on active duty. The bill specifies that creditors must cease collection activities promptly upon receiving required documentation from the service member, which includes an affidavit, military identification, and orders calling them to duty. This legislative measure is designed to alleviate financial pressures that may arise due to a reduction in income while serving.
House Bill 342 addresses consumer debt obligations for military personnel who are called to active duty. Specifically, it allows individuals, who are members of the state military forces or reserve components of the armed forces, to defer the collection of consumer debt if they are ordered to active duty for 180 days or longer. The relief applies to debts incurred before the order to active duty, provided that the individual is earning at least 10% less than when the debt was incurred due to their military service. This legislation seeks to protect military personnel from financial distress during their service.
The bill reinforces existing protections against creditor actions and would also ensure that military personnel do not lose their rights due to their service. Notably, the legislation prohibits any waivers of rights provided under the new subchapter, meaning that service members cannot relinquish their protections even if they wanted to do so. Additionally, there are stipulations included that prevent any negative repercussions regarding creditworthiness for those utilizing their rights under this bill. The insistence on maintaining creditors' limitations and the conditions under which they can operate during the military's active duty status may be contentious subject matter among some lobby groups representing financial interests.