Weekly COVID-19 Member Alert

• • State Updates: Colorado, Virginia
  • RMAI COVID-19 Resources

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State Updates – Order Extension, Automatic Exemption

Colorado Extends Period Restricting Use of Extraordinary Collection Activities Due to COVID-19

On October 25, 2020, the Administrator of Colorado’s Uniform Consumer Credit Code (“Administrator”), issued an Order, published in the Colorado Register on October 25, 2020, pursuant to SB-211. The Order extends the requirements of sections (4) and (5) of SB-211 restricting the use of extraordinary collection activities to collect debt or satisfy judgments in the State of Colorado until February 1, 2021. The Administrator’s authority to extend the restrictions to February 21, 2021 was included in SB-20-211 ( “SB-211” or “the Act”), signed into law by Governor Polis on June 29, 2020.

SB-211 prohibits a judgment creditor from initiating or maintaining any new, extraordinary collection actions, unless the judgment creditor, prior to execution or service of a writ or legal process intended to effect an extraordinary collection action, provides a written notice to the judgment debtor consumer. Such notice must conform to the following requirements:

• Be provided at least 10 but not more than 60 days prior to the execution or service of a writ or legal process intended to effect the extraordinary collection action;
• Explain the judgment debtor consumer has a right to suspend the extraordinary collection action if they have experienced financial hardship due to the COVID-19 emergency, directly or indirectly and make clear the judgment debtor consumer may inform the judgment creditor either by phone or in writing that they are experiencing economic hardship due to the COVID-19 emergency;
• Explain the judgment debtor consumer is not required to provide documentation to support the request to suspend extraordinary collections actions;
• Make clear the temporary suspension of extraordinary collections actions is not a waiver of the obligation to pay, or debt forgiveness and that interest may continue to accrue; and
• Include a statement the judgment debtor consumer may enter into a voluntary repayment plan with the judgment creditor but is not required to do so.

In addition to the notice requirements imposed on judgment creditors in relation to the initiation of any extraordinary collection activities, SB-211 also exempts from levy and sale under writ of attachment or writ of execution up to $4,000 in a depository account or accounts in the name of the debtor.  This exemption also extends to February 1, 2021.

Refer to previous RMAI Member Alerts for more information about SB-20-211:

• June 25, 2020 – Colorado Governor to Sign Temporary Law Impacting Garnishment & Bank Levies – Law Takes Effect the Same Day It Is Signed
• June 30, 2020 – Colorado Update – Garnishment Law Signed by Governor – Effective Immediately
• July 24, 2020 – Colorado – New Law Requires Updating Validation Notices and Letters with New Website Address

So, what does this mean? Members who perform extraordinary collection activities in the State of Colorado must continue to provide judgment debtor consumers with the notice required under the Act until February 1, 2021, and avoid processing writs of attachment or writs of execution on depository accounts or accounts in the name of the debtor having less than $4,000.

Virginia Enacts Automatic Exemption of Emergency Relief Payments – Effective Immediately

Yesterday Virginia’s Governor signed House Bill 5068, which extends the protections of COVID-19 payments from garnishment and amends the required notice to judgment debtors to inform them of an additional category exempt funds described as Emergency relief payments.

As reported in last week’s Member Alert, the exemption created by the amendment takes immediate effect, but does not extend to a garnishment process or any other creditor process that concluded before enactment of the Act.

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RMAI COVID-19 Resources

Visit the RMAI COVID-19 resource page on the RMAI website to access other legislative and regulatory guidance and relevant information, RMAI Member Alerts, COVID-19 recorded webinars, and more.

RMAI’s Commitment to Consumers and FAQs is posted in the Resources for Businesses, Employers and Consumers section of the COVID-19 resource page as well as on the Consumers page of the RMAI website.