Virginia House Bill HB227

Virginia 2022 Regular Session

• Introduced: 1/10/22
• Refer: 1/10/22

Caption

Debt collection; fees.

Impact

The creation of the Division of Debt Collection is expected to enhance the efficiency and effectiveness of debt recovery efforts for the state. By centralizing these operations, the bill aims to streamline the process, allowing for better management of outstanding debts owed to various state agencies. However, the ability to contract private collection agents for debts below $15,000 could raise concerns regarding accountability and the rigor of collection practices, potentially impacting individuals facing financial difficulties due to overdue debts.

Summary

House Bill 227 is focused on the establishment of a Division of Debt Collection within the Department of Law in Virginia. This division is tasked with providing legal services and advice regarding the collection of debts owed to the Commonwealth, in alignment with the Virginia Debt Collection Act. The bill outlines the authority of the Attorney General to appoint necessary personnel and to set their salaries within the appropriated budget for the division. Notably, the division is permitted to retain up to 30% of the receivables collected for state agencies, with specific provisions applying to student debt collections which allow for a maximum retention of 15%.

Contention

Discussions surrounding HB 227 have highlighted potential points of contention, particularly related to the retention of a significant percentage of the amounts collected. Critics may argue that this incentivizes aggressive collection strategies, overshadowing ethical concerns regarding debt collection practices. Additionally, with the capacity to engage private collection firms, there are concerns that this could lead to inconsistent treatment of debtors, as private agents may operate under different standards compared to state employees. Advocates of the bill, however, may emphasize the benefits of improved revenue generation for the state and the necessity of addressing debts that have been outstanding for prolonged periods.