Fair Debt Settlement Practices Act.
- Expands debt settlement protections to cover commercial debtors with debts up to $500,000.
- Requires debt settlement providers to give detailed disclosures and contract terms before signing.
- Allows debtors to cancel contracts anytime without penalty and receive refunds within seven days.
- Permits civil lawsuits with damages of $1,000-$5,000 per violation plus attorney fees.
Assembly Member Valencia proposes extending California's Fair Debt Settlement Practices Act to protect commercial debtors, establishing oversight of debt settlement services for business loans up to $500,000. The legislation mirrors existing consumer protections by requiring detailed disclosures, prohibiting deceptive practices, and enabling civil remedies for violations.
Under the expanded framework, debt settlement providers must furnish commercial clients with comprehensive contract terms, fee structures, and monthly accounting statements. The bill mandates clear disclosure of risks, including potential impacts on credit scores and tax implications of debt forgiveness. Providers cannot collect fees until reaching settlement agreements with creditors, and fees are capped at the difference between enrolled and settled debt amounts.
The measure preserves exemptions for licensed financial institutions, nonprofit organizations, and attorneys providing legal representation while establishing a four-year window for commercial debtors to pursue damages of $1,000-$5,000 per violation plus actual losses. Payment processors face parallel requirements regarding account management and timely distribution of funds upon contract termination.
 Anna CaballeroD Senator | Committee Member |  Not Contacted | |
 Tim GraysonD Senator | Committee Member | Not Contacted | |
 Megan DahleR Senator | Committee Member | Not Contacted | |
 Kelly SeyartoR Senator | Committee Member | Not Contacted | |
 Avelino ValenciaD Assemblymember | Bill Author | Not Contacted |
Email the authors or create an email template to send to all relevant legislators.
Introduced By
Latest Voting History
| Ayes | Noes | NVR | Total | Result |
|---|---|---|---|---|
| 7 | 0 | 0 | 7 | PASS |
- Expands debt settlement protections to cover commercial debtors with debts up to $500,000.
- Requires debt settlement providers to give detailed disclosures and contract terms before signing.
- Allows debtors to cancel contracts anytime without penalty and receive refunds within seven days.
- Permits civil lawsuits with damages of $1,000-$5,000 per violation plus attorney fees.
Email the authors or create an email template to send to all relevant legislators.
Introduced By
Assembly Member Valencia proposes extending California's Fair Debt Settlement Practices Act to protect commercial debtors, establishing oversight of debt settlement services for business loans up to $500,000. The legislation mirrors existing consumer protections by requiring detailed disclosures, prohibiting deceptive practices, and enabling civil remedies for violations.
Under the expanded framework, debt settlement providers must furnish commercial clients with comprehensive contract terms, fee structures, and monthly accounting statements. The bill mandates clear disclosure of risks, including potential impacts on credit scores and tax implications of debt forgiveness. Providers cannot collect fees until reaching settlement agreements with creditors, and fees are capped at the difference between enrolled and settled debt amounts.
The measure preserves exemptions for licensed financial institutions, nonprofit organizations, and attorneys providing legal representation while establishing a four-year window for commercial debtors to pursue damages of $1,000-$5,000 per violation plus actual losses. Payment processors face parallel requirements regarding account management and timely distribution of funds upon contract termination.
Latest Voting History
| Ayes | Noes | NVR | Total | Result |
|---|---|---|---|---|
| 7 | 0 | 0 | 7 | PASS |
Anna CaballeroD Senator | Committee Member | Not Contacted | |
Tim GraysonD Senator | Committee Member | Not Contacted | |
Megan DahleR Senator | Committee Member | Not Contacted | |
Kelly SeyartoR Senator | Committee Member | Not Contacted | |
Avelino ValenciaD Assemblymember | Bill Author | Not Contacted |