Limitations On Extraordinary Collection Actions
The act prohibits a judgment creditor from initiating a new extraordinary collection action from the effective date of the act through November 1, 2020, except in accordance with the requirements of the act. An extraordinary collection action is defined as an action in the nature of a garnishment, attachment, levy, or execution to collect or enforce a judgment on a debt as defined under the "Colorado Fair Debt Collection Practices Act" (FDCPA). Before initiating an extraordinary collection action, the judgment creditor must send a notice to the judgment debtor explaining that the judgment debtor can temporarily suspend the extraordinary collection action if the debtor is facing financial hardship as a result of the COVID-19 emergency. To exercise this right, the debtor is required to notify the judgment creditor that the debtor is experiencing hardship as a result of the crisis. The judgment debtor is not required to provide additional documentation to the judgment creditor.
The use of an extraordinary collection action during the period of the prohibition constitutes an unfair and unconscionable means of collecting a debt under the FDCPA. The administrator of the "Uniform Consumer Credit Code" (administrator) is authorized to issue an order extending the prohibition through February 1, 2021, if the administrator finds that the extension is necessary to preserve the resources of state and local agencies or to protect the residents of Colorado from economic hardship as a result of the disaster emergency caused by COVID-19.
From June 29, 2020, through February 1, 2021, up to $4,000 cumulative in a depository account or accounts in the debtor's name is exempt from levy and sale under a writ of attachment or execution.
An attempt to collect amounts in excess of what is permitted under statutes limiting garnishment, attachment, and execution is an unfair or unconscionable debt collection practice for purposes of the FDCPA.
(Note: This summary applies to this bill as enacted.)