Please oppose HB 1426. Not allowing General District court judgments to be extended if not paid in 10 years will have several consequences that will hurt low-income consumers, presumably the folks this bill is attempting to protect. Creditors will have no choice but to be much more aggressive in collections rather than working with consumers on payment plans that may stretch beyond 10 years. Creditors will also file many more actions in Circuit Court where they can have more time to collect. Circuit Court fees are more expensive and those costs will be passed to the debtor consumer at judgment. Additionally Circuit Courts are more formal and more difficult for pro se debtor to successfully navigate and defend a claim. Finally, Circuit Court clerks will be overwhelmed as creditors file more and more cases in Circuit court to allow for longer collection period.

As an attorney who formerly clerked in Chesterfield Circuit Court and now represents creditors, I encourage legislators to talk to the circuit court judges and clerks in your district about this bill. Last year the jurisdictional limit for General District Court was raised to $50,000 to reduce the caseload burden on circuit courts. This bill will drive debt collection actions out of General District Court and into Circuit Court, which has never had to deal with these low balance cases before. The jurisdictional minimum in Circuit Court is $4,500 so it would potentially be malpractice to file those clams in a General District Court where liens are no longer available. Tens of thousands of lower balance debts will bog down the Circuit Court which is not structurally set up like a General District Court to administer justice quickly in routine matters. This bill will take resources away from more complex criminal and business cases that the Circuit Court is well equipped to handle, and delay justice for all litigants.

As an Attorney, this bill is going to force much harsher collection action against consumers by cutting the enforcement period in half. Further, this will alter the lending practices of many small businesses who would otherwise lend to subprime customers- the lending will tighten significantly and consumers will receive less access to credit, especially subprime consumers.

This bill is intended to address the problem of stale judgments catching debtors off guard. Other states have satisfactorily addressed the problem by allowing the creditor to renew judgment by.filing a new formal suit. Debtor is served by the sheriff, etc. Attorneys often prefer this remedy rather that being forced to foreclose a lien on a debtor’s house (before the 10 year statute of limitations expires ).

As an attorney, I do not understand this proposal to give a general district court judgment less dignity than a circuit court judgment. This is especially inexplicable to me after the legislature just recently increased the jurisdictional limit for general district court, to encourage more cases to be filed in the general district courts. This bill undermines that effort and will force us to go back to filing cases in the circuit courts, which costs our clients more money in filing and legal fees. This bill is bad for the small businesses I represent as an attorney.

Opposition to HB1426 As a supplement to my prior comments, treating judgments of the general district courts with less dignity than judgments of the circuit courts will drive many more cases to circuit court. The general jurisdictional limit of GDC was not long ago increased to $50,000, allowing more collection actions to be filed in GDC. However, if a judgment in general district court essentially evaporates after 10 years, then many, many more actions will be filed in circuit court instead.

As a lawyer, I oppose this bill because limiting the life of a general district court judgment to 10 years, with no ability to extend it, is unfair to judgment creditors, many of which are small businesses that provided services for which they were not paid. The cumulative effect of statutes that protect more and more debtor assets from the effect of judgments is to make judgments harder to collect, requiring more time to collect them. Last year, for instance, the General Assembly passed the Medical Debt Protection Act, which will prohibit ALL garnishment of medical debt beginning in July. This year, the GA is considering a bill that will protect other debtors from bank garnishments by exempting a large amount in their accounts. Many other exemptions and protections already exist for debtors who, for whatever reason, did not pay their bills. If a creditor has a judgment against a self-employed debtor no longer concerned about wage or bank garnishment, collection options are extremely limited. Due to restrictions on enforcement of liens against real property and, in the case of medical debt, even the placement of liens on personal property, a judgment may not be paid until the debtor voluntarily sells or refinances a home. Limiting the ability of a creditor to extend the judgment beyond 10 years eliminates even that slim chance of recovery and further reduces the value of judgments. A big difference exists between legislation that protects debtors against unfair credit practices, unfair trade practices, misleading debt collectors, etc. and legislation that amounts to little more than helping debtors evade their creditors and just debts. Judgment creditors often are NOT big lenders and debt buyers but instead are your constituent business owners who provide services to other of your constituents.