Senate Bill 21-002 and Collection Restrictions Continued

As you may be aware, Senate Bill 20-211 (“SB 20-211”), which put restrictions on certain collection actions, expired on February 1, 2021.  However, these restrictions were extended by Senate Bill 21-002 (“SB 21-002”) signed into law on January 21, 2021.  Like its predecessor, the new law prohibits a debt collector from taking “Extraordinary Collection Actions” if certain prerequisites are not met.  The prerequisites are:

  • the debt collector is required to send a notice to the debtor advising that the debtor has the right to request temporary suspension of certain collection actions if they have been financially impacted by COVID-19

  • the debtor must be given between 10-60 days to respond to the notice

  • if a debtor claims they have been financially impacted by COVID-19, the creditor is then prohibited from taking the Extraordinary Collection Action during the term of this law, which is scheduled to expire on June 1, 2021

Q.  What are the “Extraordinary Collection Actions” that are restricted by SB 21-002?

 A.  SB 21-002 specifically applies to an HOA’s attempts to:

  • garnish a homeowner’s bank account or paycheck

  • appoint a Receiver to collect rent

  • proceed with a sheriff’s sale of the property once a foreclosure has been obtained

 Q.  Does it matter if the debt accrued prior to the COVID-19 pandemic?

 A.  No.  SB 21-002 does not provide any exceptions to the collection restrictions if an owner indicates that they have been financially impacted by COVID-19.

 Q.  Can an HOA require evidence that a homeowner is financially impacted by COVID-19?

 A.  No.  SB 21-002 specifically indicates that a homeowner is not required to provide evidence.

 Q.  If homeowners indicate they are financially impacted by COVID-19, does this affect the actual debt?

 A.  SB 21-002 does NOT waive the homeowners’ obligation to pay the debt.

If you have questions regarding SB 21-002, contact us at info@westernlawgroup.com

 

THIS IS NOT LEGAL ADVICE.  FOR INFORMATIONAL PURPOSES ONLY.

Gabriel StefuWesternLaw Group LLC