October 17, 2023 — Press Release

Advocates Cheer Reform Removing the Risk of Arrest for Consumers with Debts

SACRAMENTO – A new California law ensures that no one in the state can be imprisoned because they owe a consumer debt. On October 9, Gov. Gavin Newsom approved Assembly Bill 1119, a measure authored by Assemblymember Buffy Wicks and sponsored by the California Low Income Consumer Coalition and the National Consumer Law Center.   

“Even though debtors’ prisons aren’t supposed to exist anymore, Californians could still be issued arrest warrants if they didn’t appear in court for an old credit card debt,” said Michael Best, senior attorney at the National Consumer Law Center. “This law ensures that no one can be arrested, or threatened with arrest, over a consumer debt. And it should be a model for other states to take steps to extinguish these last vestiges of debtors’ prisons.”

Under previous California law, once a plaintiff creditor or debt collector obtained a judgment against a consumer, the debt collector could seek to “examine” the consumer to determine their assets. If the consumer failed to appear in court for the examination, the judge in the case could order the consumer arrested.

“Even if the warrant didn’t result in jail time for the defendant, it could exacerbate a future minor infraction – such as being pulled over for a broken taillight,” said Leigh Ferrin, member of the California Low Income Consumer Coalition, the bill’s co-sponsor. “This change in the law will keep a debt collection from escalating from the courtroom to a jail cell.”

“Assembly Bill 1119 helps ordinary working families whose lives could be thrown into tumult by an arrest warrant. At the same time, it does not take away any collection tools,” said California Assemblymember Buffy Wicks (D-14). “The law simply makes clear that no one should be arrested, or threatened with arrest, over a consumer debt.” 

Nearly two out of three debt cases in California are default judgments in favor of debt collectors because consumers were not able to defend themselves in court. This is often because they were never served with proper notice, have work or child care commitments, cannot afford an attorney and do not know what defenses they may have, are unaware they have to take action, or are afraid to interact with the judicial system. The difficulty most people have in navigating the court system significantly contributes to failures to appear, and even individuals without any income or assets or people who don’t actually owe the debt may feel compelled to pay because of a fear of arrest.  

“This important law will rebalance the power dynamic between debt collectors and families with consumer debt,” said Ted Mermin, director of the California Low Income Consumer Coalition. “The law also reduces the need for court appearances by people whose income and property value are under the threshold protected from collection by existing California law. Now, those people can file a financial affidavit rather than taking up court time and losing a day they could be working or caring for a family member.” 

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