RMAI filed an amicus curiae brief this week asking an Arizona court to toss out a November ballot initiative that would materially harm judgment creditors by almost doubling the state’s homestead exemption and nearly quadrupling its exemption for wages, among other things.
Under Arizona law, ballot initiatives cannot contain statements that are “objectively false” or contain misleading information. The Arizona ballot initiative included a statement that it “[d]oes not change existing law regarding secured debt.” RMAI’s brief explains that this statement is false and misleading because an Arizona judgment can create liens on a judgment debtor’s real property, personal property and accounts. While these liens are not consensual liens, like a mortgage or a security interest in a motor vehicle, judgment creditors are provided many of the same rights as consensual lien holders. In fact, under federal bankruptcy law, Arizona judgment liens are often deemed to be “secured claims” just like consensual liens. To the extent that the ballot initiative would substantially increase a judgment debtor’s exemptions, it does in fact “change existing law regarding secure debt.”
A copy of the brief is available here. A decision is expected any day.
RMAI Board Member Amber Russo and the Arizona Creditor’s Bar are leading the cross-industry efforts in stopping this initiative. As previously reported, if successful in getting the initiative on the ballot, chance of passage in November is high. Click here for more information on how you can help.
This Member Alert is intended for members of the Receivables Management Association International, is for informational purposes only, and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.