Watson And Hazlewood Lead Legislative Efforts To Set Fair, Consistent Rules For Debt Collection Processes

  • Wednesday, June 19, 2024

Governor Bill Lee has signed into law SB 2375/HB 2320 – legislation that officials said brings new clarity and transparency to the debt collection process.

Under the new law, debt buyers are required to provide additional information about the original debt when they file suit against an individual to collect. Third party debt buyers will also now be required to show proof of the debt to the judge before a default judgment can be entered.

“A single debt collection episode can trigger a financial catastrophe for families who are already struggling,” said Maeghan Jones, president and CEO of the Community Foundation of Greater Chattanooga, which supported the legislation. “Many consumers who face debt collection lawsuits are not represented by an attorney and may not know what they owe, why, or what their options are. When the stakes are this high, it is crucial that the system is transparent and fair for everybody. This legislation sets clear rules, which everyone should appreciate.”

“If a debt dispute ends up in court, both sides deserve to have a full and fair accounting of the facts before a judge makes a ruling,” said Senator Bo Watson (R-Hixson), who sponsored the legislation in the Senate. “This new law takes meaningful steps to make sure that will happen moving forward.”

“In our legal system, creditors and debtors both have rights, and this legislation strongly reaffirms that,” said Rep. Patsy Hazlewood (R-Signal Mountain). “I’m proud to have supported a bill which establishes a fairer playing field for everyone.”

The final version of this legislation was passed unanimously by both chambers. The bill was signed into law by Governor Lee and goes into effect July 1.

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