SB-706
Consumer Protection

Consumer debt: charged-off debts.

Introduced
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Prohibits the sale of charged-off consumer debt after one year from the charge-off date.
  • Requires creditors to notify consumers when their debt is sold to a debt buyer.
  • Limits debt buyers to one year after charge-off to take legal action for debt collection.
  • Mandates creditors to pursue debt collection within 90 days of charging off the debt.

Summary

Senator Hurtado's consumer debt legislation places new restrictions on the sale and collection of charged-off consumer debts in California, establishing time limits for debt transfers and requiring creditor notifications to consumers. The bill prohibits creditors from selling or assigning charged-off consumer debts more than one year after the charge-off date and mandates that creditors notify consumers when their debt is sold or assigned to debt buyers.

The legislation modifies legal timelines for debt collection actions, creating distinct deadlines for creditors and debt buyers. Actions to recover charged-off consumer debts must be initiated within two years of providing notice of default to the consumer or within 90 days of the charge-off date, whichever comes first. Debt buyers face an additional restriction - they cannot pursue collection actions more than one year after the debt's charge-off date.

These provisions add to existing California law governing debt buyers and charged-off consumer debts. The bill maintains the current four-year statute of limitations for actions on written contracts while carving out specific exceptions for charged-off consumer debts. Once the applicable time period expires, no party may initiate legal proceedings or arbitration to collect the debt unless an extension applies under existing law.

Key Dates

Next Step
Referred to the Senate Standing Committee on Judiciary
Next Step
Senate Committee
Referred to the Senate Standing Committee on Judiciary
Hearing has not been scheduled yet
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Senate Judiciary Hearing
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Senate Judiciary Hearing
Introduced. To Com. on RLS. for assignment. To print.
Senate Floor
Introduced. To Com. on RLS. for assignment. To print.
Introduced. To Com. on RLS. for assignment. To print.

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Benjamin AllenD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Eloise ReyesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Scott WienerD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 14 row(s) selected.
Page 1 of 3
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Roger NielloR
Senator
Committee Member
Profile
Benjamin AllenD
Senator
Committee Member
Profile
Eloise ReyesD
Senator
Committee Member
Profile
Scott WienerD
Senator
Committee Member
Profile
Henry SternD
Senator
Committee Member
Profile
Maria DurazoD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Bill Author
Profile
Tom UmbergD
Senator
Committee Member
Profile
John LairdD
Senator
Committee Member
Profile
Akilah Weber PiersonD
Senator
Committee Member
Profile
Angelique AshbyD
Senator
Committee Member
Profile
Aisha WahabD
Senator
Committee Member
Profile
Suzette ValladaresR
Senator
Committee Member

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Melissa Hurtado
Melissa HurtadoD
California State Senator
10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/21/2025)

Latest Voting History

April 22, 2025
PASS
Senate Committee
Senate Judiciary Hearing
AyesNoesNVRTotalResult
130013PASS

Key Takeaways

  • Prohibits the sale of charged-off consumer debt after one year from the charge-off date.
  • Requires creditors to notify consumers when their debt is sold to a debt buyer.
  • Limits debt buyers to one year after charge-off to take legal action for debt collection.
  • Mandates creditors to pursue debt collection within 90 days of charging off the debt.

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Melissa Hurtado
Melissa HurtadoD
California State Senator

Summary

Senator Hurtado's consumer debt legislation places new restrictions on the sale and collection of charged-off consumer debts in California, establishing time limits for debt transfers and requiring creditor notifications to consumers. The bill prohibits creditors from selling or assigning charged-off consumer debts more than one year after the charge-off date and mandates that creditors notify consumers when their debt is sold or assigned to debt buyers.

The legislation modifies legal timelines for debt collection actions, creating distinct deadlines for creditors and debt buyers. Actions to recover charged-off consumer debts must be initiated within two years of providing notice of default to the consumer or within 90 days of the charge-off date, whichever comes first. Debt buyers face an additional restriction - they cannot pursue collection actions more than one year after the debt's charge-off date.

These provisions add to existing California law governing debt buyers and charged-off consumer debts. The bill maintains the current four-year statute of limitations for actions on written contracts while carving out specific exceptions for charged-off consumer debts. Once the applicable time period expires, no party may initiate legal proceedings or arbitration to collect the debt unless an extension applies under existing law.

10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/21/2025)

Key Dates

Next Step
Referred to the Senate Standing Committee on Judiciary
Next Step
Senate Committee
Referred to the Senate Standing Committee on Judiciary
Hearing has not been scheduled yet
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Senate Judiciary Hearing
Senate Judiciary Hearing
Senate Committee
Senate Judiciary Hearing
Senate Judiciary Hearing
Introduced. To Com. on RLS. for assignment. To print.
Senate Floor
Introduced. To Com. on RLS. for assignment. To print.
Introduced. To Com. on RLS. for assignment. To print.

Latest Voting History

April 22, 2025
PASS
Senate Committee
Senate Judiciary Hearing
AyesNoesNVRTotalResult
130013PASS

Contacts

Profile
Anna CaballeroD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Benjamin AllenD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Eloise ReyesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Scott WienerD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 14 row(s) selected.
Page 1 of 3
Select All Legislators
Profile
Anna CaballeroD
Senator
Committee Member
Profile
Roger NielloR
Senator
Committee Member
Profile
Benjamin AllenD
Senator
Committee Member
Profile
Eloise ReyesD
Senator
Committee Member
Profile
Scott WienerD
Senator
Committee Member
Profile
Henry SternD
Senator
Committee Member
Profile
Maria DurazoD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Bill Author
Profile
Tom UmbergD
Senator
Committee Member
Profile
John LairdD
Senator
Committee Member
Profile
Akilah Weber PiersonD
Senator
Committee Member
Profile
Angelique AshbyD
Senator
Committee Member
Profile
Aisha WahabD
Senator
Committee Member
Profile
Suzette ValladaresR
Senator
Committee Member