SB29 By Senator Coleman RFD Banking and Insurance Rd 1 03-MAR-15

SYNOPSIS: Under existing law a debt collector is required to be licensed to collect debt in Alabama.

This bill would require debt buyers and other debt collectors to possess certain basic information about the debt before initiating collection efforts, including proof of indebtedness by the consumer, date of the debt, identity of the original creditor, and itemization of all fees, charges, and payments.

This bill would prohibit the collection of a consumer debt by any party not in possession of at least a copy of the original contract, or other documentation evidencing the consumer's liability.

This bill would require a creditor and each subsequent holder of the debt to retain and pass on to the next holder all communications from the consumer concerning the debt and information about all known disputes and defenses.

This bill would allow consumers to record abusive telephone calls by debt collectors.

This bill would prohibit consumers from arrest or imprisonment for failure to pay a consumer debt.

This bill would provide that any changes to a consumer form contract involving financial services shall be agreed to by the consumer in writing.

This bill would prohibit "choice of law" provisions in consumer form contracts that select laws of states other than the consumer's home state.

This bill would prohibit forum selection provisions in consumer form contracts.

This bill would provide that any consumer credit obligation is void if the entity extending the credit did not have a license required by state law.

This bill would provide a single uniform, reasonable statute of limitations for consumer debts.

This bill would provide that the statute of limitations cannot be voluntarily given up or waived.

This bill would extinguish the debt after the statute of limitations passes.

This bill would prevent any collection activities for stale debts.

This bill would require a creditor to provide a consumer with a notice 30 days before filing a legal action or arbitration proceeding to collect a debt.

This bill would require a creditor taking legal action or initiating arbitration to collect a debt to provide adequate documentation about that debt.

This bill would require each debt collector or buyer of a debt to provide a copy of the original contract or other documentation reflecting that the consumer actually incurred the debt.

This bill would provide that the failure to respond will not be deemed as an admission of facts to establishing liability for the debt.

This bill would require an additional notice of the lawsuit to be mailed to the consumer-defendant by the clerk of the court.

This bill would require that any party seeking a judgment for a consumer debt provide the court with sufficient documentation as to the amount, nature, and ownership of the debt.

This bill would allow a court to grant a default judgment to a consumer if he or she appears for trial to defend himself or herself against a collector who fails to appear in court.

This bill would allow a consumer certain amounts of time to ask the court to remove or set aside a default judgment.

This bill would prohibit state courts from confirming an arbitration award unless certain conditions were met, including compliance with other parts of the law.

This bill would limit the amount of interest that can be assessed to a consumer debtor when a debt collector prevails in a collection lawsuit against the consumer debtor.

This bill would prohibit a creditor from seeking attorney's fees from a consumer in a collection lawsuit to only those instances in which the underlying contract or other document obligates the consumer for the fees.

This bill would provide certain exemptions.

This bill would provide for the waivers of personal property exemptions and security interests in exempt personal property.

This bill would provide for homestead exemption.

This bill would provide for scope of exemptions.

This bill would provide for tracing of exempt property.

This bill would provide for the adjustment of dollar amounts.

This bill would provide for the procedures relating to property exempt from levy.

This bill would provide for protection from discharge.

This bill would provide for remedies for wrongful seizure of exempt property.

A BILL TO BE ENTITLED AN ACT

Relating to consumer debtors; to require debt buyers and other debt collectors to possess certain basic information about the debt before initiating collection efforts, including proof of indebtedness by the consumer, date of the debt, identity of the original creditor, and itemization of all fees, charges, and payments; to prohibit the collection of consumer debt by any party not in possession of at least a copy of the original contract, or other documentation evidencing the liability of the consumer; to require a creditor and each subsequent holder of the debt to retain and pass on to the next holder all communications from the consumer concerning the debt and information about all known disputes and defenses; to allow consumers to record abusive telephone calls by debt collectors; to prohibit consumers from arrest or imprisonment for failure to pay a consumer debt; to provide that any changes to a consumer form contract involving financial services shall be agreed to by the consumer in writing; to prohibit provisions in consumer form contracts that select laws of states other than the home state of the consumer; to prohibit forum selection provisions in consumer form contracts; to provide that any consumer credit obligation is void if the entity extending the credit did not have a license required by state law; to provide a single uniform, reasonable statute of limitations for consumer debts; to provide that the statute of limitations cannot be voluntarily given up or waived; to extinguish the debt after the statute of limitations passes; to prevent any collection activities for stale debts; to require a creditor to provide a consumer with a notice 30 days before filing a legal action or arbitration proceeding to collect a debt; to require a creditor taking legal action or initiating arbitration to collect a debt to provide adequate documentation about that debt; to require each debt collector or buyer of a debt to provide a copy of the original contract or other documentation reflecting that the consumer actually incurred the debt; to provide that the failure to respond will not be deemed as an admission of facts to establishing liability for the debt; to require an additional notice of the lawsuit to be mailed to the consumer-defendant by the clerk of the court; to require that any party seeking a judgment for a consumer debt provide the court with sufficient documentation as to the amount, nature, and ownership of the debt; to allow the court to grant a default judgment to a consumer if he or she appears for trial to defend himself or herself against a collector who fails to appear in court; to allow a consumer certain amounts of time to ask the court to remove or set aside a default judgment; to prohibit state courts from confirming an arbitration award unless certain conditions were met, including compliance with other parts of the law; to limit the amount of interest that can be assessed to a consumer debtor when a debt collector prevails in a collection lawsuit against the consumer debtor; to prohibit a creditor from seeking attorney's fees from a consumer in a collection lawsuit to only those instances in which the underlying contract or other document obligates the consumer for the fees; to provide certain exemptions; to provide for the waivers of personal property exemptions and security interests in exempt personal property; to provide for homestead exemption; to provide for scope of exemptions; to provide for tracing of exempt property; to provide for the adjustment of dollar amounts; to provide for the procedures relating to property exempt from levy; to provide for protection from discharge; and to provide for remedies for wrongful seizure of exempt property.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act may be known and cited as the Family Financial Protection Act.

Section 2. The Legislature finds and declares the following:

(1) The purpose of the act is to protect consumers.

(2) This act should be construed as a consumer protection statute for all purposes.

Section 3. The following words shall have the following meanings unless the context clearly indicates otherwise:

(1) CONSUMER. A natural person.

(2) CONSUMER DEBT. An obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not the obligation has been reduced to judgment.

(3) CONSUMER FORM CONTRACT. A contract in writing between a business and a consumer involving goods and services, including credit or financial services, primarily for personal, family, or household purposes.

(4) CREDITOR. A person to whom a debt is owed and includes a judgment creditor and any other person that obtains an execution on a debt.

(5) DEBT BUYER. A person or entity that is engaged in the business of purchasing delinquent or charged-off consumer loans or consumer credit accounts, or other delinquent consumer debt for collection purposes, whether it collects the debt itself or hires a third party for collection or an attorney for litigation in order to collect the debt. A debt buyer is considered to be a debt collector for all purposes.

(6) DEBT COLLECTOR. Any person who regularly collects or attempts to collect, directly or indirectly, consumer debts owed or due or asserted to be owed or due another. The term does not include any officer or employee of a creditor who, in the name of the creditor, collects debts for the creditor, but it does include any creditor who, in the process of collecting its own debts, uses any name other than its own which would indicate that a third person is collecting or attempting to collect the debts.

(7) DEPENDENT. A person who relies in whole or in significant part on the debtor for his or her support or maintenance.

(8) DISPOSABLE EARNINGS. That part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld such as taxes, Social Security or alternative pension and Medicare withholding, and after further deduction of up to 15 percent of the remainder for contributions for health insurance, a medical expense account, a pension, or a retirement account.

(9) EARNINGS. Compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, payment for skilled, personal or professional services, or otherwise, whether earned as an employee or as an independent contractor, and also includes alimony.

(10) EXECUTION. Includes an attachment, levy, garnishment, or other disablement, freeze, or seizure of property, whether pre-judgment or post-judgment, to satisfy a debt. Except for purposes of Section 22, it also includes a creditor's exercise of a right of setoff to collect a debt. It does not include self-help repossession of collateral.

(11) EXECUTING OFFICER. The official, creditor, or other person who issues or implements an execution.

(12) EXEMPT. Unless otherwise specified, not subject to execution, levy, attachment, garnishment, setoff, self-help, seizure, or any other form of process, court order, creditor, or other action for the purpose of debt collection or restitution or other equitable claim. Funds that are exempt remain exempt when they are paid or transferred to the debtor, the debtor's spouse, beneficiary, or dependent or to an account for the benefit of the debtor, the debtor's spouse, beneficiary, or dependent.

(13) GARNISHMENT. A legal or equitable procedure through which the earnings, property, or funds of any person are required to be withheld by another person for payment of a debt owed to a creditor.

(14) ORIGINAL CREDITOR. The entity, other than a debt collector, to which a consumer debtor made his or her last payment on a consumer debt before it was first sold to a debt buyer, or, if the consumer never made a payment, the entity that last sent the consumer a bill or demand for payment before the debt was first sold to a debt buyer. When this act requires the original creditor to be identified, the name shall be that which was used in its dealings with the consumer.

(15) NECESSARY. Reasonably essential to or needed for everyday living, including any special needs by reason of health or physical or mental infirmity.

(16) RESIDENT. A person living in this state temporarily or permanently.

(17) RESIDENCE. Includes real or personal property, including a share in a residential cooperative, a beneficial interest in a trust applying to the property, or a manufactured home, that is owned individually or in any form of joint ownership by the debtor, the debtor's dependent, or spouse.

(18) VALUE. Current fair market value of accounts, goods or property less the amount of any liens or security interests in the accounts, goods, or property, based on the price that would be paid, assuming a willing buyer and a willing seller, for accounts, goods, or property of similar age and condition. A debtor's testimony as to the value of property the debtor owns or as to the advertised value of property similar to that claimed as exempt shall be admissible as evidence of the value of an item.

Section 4. A business including its officers, agents, employees, or representative of a person may not individually or in conjunction or cooperation with another business or person solicit the execution of, receive, or rely upon a consumer form contract, including reliance upon the contract as a basis for a suit or claim, unless the business or person has complied with this act and the contract is in compliance with this act.

Section 5. (a) A choice of law provision in a consumer form contract which provides that the contract is to be governed or interpreted pursuant to the laws of another state is void, if the contract is signed by the consumer or otherwise formed while the consumer resides in this state. Enforcement and interpretation of a contract shall be governed by the laws of this state if enforcement of the contract is sought in a court of this state.

(b) A forum selection provision in a consumer form contract which provides that any claims or actions related to the contract shall be litigated in a forum outside of this state is void, if the contract is signed by the consumer or otherwise formed while the consumer resides in this state.

(c) All consumer form contracts involving a loan, extension of credit, deposit account, or other financial services shall be signed by the consumer in writing or electronically in compliance with Section 101(c) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001(c).

(d) Any change of terms to a consumer form contract described in subsection (b) shall be agreed to by the consumer by affirmative consent, signed by the consumer in writing or electronically in full compliance with the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001(c) and a copy of the charges shall be provided to the consumer.

(e) A consumer form contract may not contain any of the following:

(1) A provision that the consumer will hold the other party harmless, or that otherwise relieves the other party of liability, for any harm or damage caused to the consumer arising from the contract.

(2) A confession of judgment clause.

(3) A waiver of the right to a jury trial, if applicable, in any action brought by or against the consumer.

(4) Any assignment of or order for payment of wages or other compensation for services.

(5) A provision in which the consumer agrees not to assert any claim or defense arising out of the contract, or to seek any remedies pursuant to any consumer protection law.

(6) A waiver of any provision of this act or any other consumer protection statute. Any waiver shall be deemed null, void, and of no effect.

(7) A provision requiring or having the practical effect of requiring that any aspect of a resolution of a dispute between the parties to the agreement be kept confidential. This provision may not affect the right of the parties to agree that certain specified information is a trade secret or otherwise confidential or to later agree, after the dispute arises, to keep a resolution confidential.

(f) Any consumer form contract or provision thereof violating this act shall be void and unenforceable. If only one provision of a consumer form contract violates this act, a court may refuse to enforce other provisions of the contract as equity may require.

(g) Any consumer credit transaction entered into by a consumer with a person who is required to be licensed but is not licensed is void, and neither the obligee nor any assignee of the obligation shall have any right to collect, receive, or retain any principal, finance charge, or other fees in connection with the transaction.

Section 6. (a) A person may not attempt to collect on a consumer debt without obtaining reasonable verification that the debtor owes the debt in the amount claimed, which shall include all of the following:

(1) Complete, authenticated documentation that the person attempting collection is the owner of the specific debt instrument or account at issue.

(2) Reasonable verification of the debtor's liability and the amount of the debt allegedly owed by the debtor. For purposes of this subdivision, reasonable verification shall include all of the following:

a. Documentation of the name of the original creditor.

b. The name, last address, date of birth and last four digits of the Social Security number of the debtor as it appeared on the original creditor's records.

c. The debtor's last account number with the original creditor.

d. The date that the debt was incurred, and the date and amount of the last payment by the consumer toward the debt; in the case of credit, the date that the debt was incurred shall be the last extension made for the purchase of goods or services, for the lease of goods, or as a loan of money.

e. A copy of the signed contract, signed application, or other documents that provide evidence of the consumer's liability and the terms thereof.

f. An itemized accounting of the amount claimed to be owed, including the amount of the principal; the amount of any interest, fees, or charges; and whether the charges were imposed by the original creditor, a debt collector, or a subsequent owner of the debt. If the debt arises from a credit card, the account shall include copies of the last 24 periodic statements required by the Truth in Lending Act, 15 U.S.C. § 1637(b), that evidence the transactions, purchases, fees, and charges that comprise the debt. Copies of actual business records of the original creditor and any debt collector or subsequent owner of the debt containing the above documentation shall be provided to the consumer, upon request and without fee, within 20 days of the request.

(b) A seller of a consumer debt, whether the original creditor or a debt buyer, shall provide all of the following to the buyer or assignee when selling the debt:

(1) The documentation listed in subsection (a).

(2) A statement disclosing the following:

a. Whether the consumer has disputed or asserted any defenses to any portion of the debt, and notes or recordings of all related communications.

b. Any validation, or lack thereof, that the seller has provided the consumer pursuant to the federal Fair Debt Collection Practices Act or has received from the original creditor or previous seller in response to a dispute or request for validation by the consumer.

c. Whether any settlement has been reached concerning any portion of the debt.

d. Whether the debt is within the limitation period set forth in Section 7.

e. Whether the consumer is or has been represented by an attorney and the attorney's contact information.

f. Whether the consumer has informed the collector that a time or place is inconvenient to the consumer for communication or has requested that collection contacts cease.

g. Whether the debt has been discharged or listed in bankruptcy.

h. Any illness or disability claimed by the consumer or known to the seller of the debt.

i. Whether the consumer has a disability, is over age 62, or is a limited English speaker.

j. Whether the consumer is or has been a service member at any time since the formation of the contract.

k. Whether the consumer is known to receive income that is exempt from garnishment or attachment.

(c) A debt collector that is a debt buyer or acting on behalf of a debt buyer may not make any written statement in connection with any attempt to initiate or pursue the collection of a debt unless that statement is supported by the evidence set forth in subsection (a) which has been reviewed by the debt buyer. The documentary evidence shall be retained on file by the debt buyer for a period of at least five years and shall be provided to any affected debtor without a fee within 10 business days of a request. An affidavit or other sworn statement referring to documents not attached or included as part of that statement is not sufficient to meet this requirement.

(d) Whenever a payment is received by a debt collector, including a debt buyer, toward payment of a consumer debt, an original receipt or an exact copy thereof shall be furnished to the person from whom payment is received within 10 days of payment. All receipts shall:

(1) Show the amount and date paid, the name of the debt buyer, the account number assigned by the debt buyer, the name of the original creditor and the account number issued by the original creditor, redacted for security purposes to show only the last four digits. If the debt buyer is in possession of the names of any prior purchasers of the debt and the account numbers issued by those purchasers, this information shall also be included.

(2) State clearly and conspicuously whether the payment is accepted as payment in full or as a full and final compromise of the debt. If any part of the debt is owed after the payment is made, the receipt shall state clearly and conspicuously the balance due after payment is credited. Copies of all receipts issued pursuant to this section shall be kept by the debt collector for three years.

(e) A debt collector shall provide written confirmation to the consumer, within five business days, of any debt payment schedule or settlement agreement reached regarding a consumer debt.

(f) In all communications concerning a consumer debt, the debt collector shall list a telephone number for which a call to that number shall be either:

(1) Answered by a natural person qualified to address consumer inquiries concerning communications the debt collection agency has with consumers.

(2) Routed to a natural person within 60 seconds after the call is linked to the collector's telephone line for the number and that shall be answered by the natural person within 60 seconds after the call is routed. The required call-back number shall be answered by a natural person during all times when the collector conducts business with consumers.

(g) Notwithstanding any other provision of law, it is lawful for a consumer to record any telephone conversation between the consumer and a debt collector or debt buyer, without the knowledge or consent of the collector. The recording shall be admissible in federal and state courts or other legal proceedings respecting debt collection practices or seeking collection of a consumer debt.

(h) Notwithstanding any other law, a debt collector may not seek a warrant for the arrest of a debtor for any action or failure to act that arises or relates to a civil lawsuit, unless the debtor has committed a violation of the criminal law of this state.

(i) Notwithstanding any other provision of law, a debtor may not be imprisoned for failing to pay a consumer debt or for violating an order to pay a consumer debt.

Section 7. (a) Any action for the collection of a consumer debt shall be commenced within three years of the accrual of the cause, which shall be the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment. This period shall apply whether the claim sounds in contract, account stated, open account or other cause, and notwithstanding the provisions of any other statute of limitations unless that statute provides for a shorter limitations period. This subsection shall apply to all claims brought after the date of enactment of this act.

(b) A waiver by a consumer of any protection provided by or any right of the consumer under this section is void, and may not be enforced by any federal or state court or any other person.

(c) If a consumer debt has been charged-off or placed for collection, or there has not been any payment on the debt for over 180 days, any subsequent payment toward the debt may not extend the three-year limitation period, nor shall it bar the consumer from asserting any defenses to the collection of a consumer debt. If a payment on a defaulted or charged-off debt completely cures the default and pays off any delinquency, then a new cause of action may accrue upon a subsequent default or charge-off.

(d) When the period within which an action may be commenced under this section has expired, the right to collect the consumer debt is extinguished as well as the remedy. No person shall attempt to collect a consumer debt after the three-year period described in subsection (a) has expired.

(e) If a consumer debt was created by or based upon a consumer form contract, any action for collection of that consumer debt shall be based on only a claim for breach of contract and not on an open account, account stated, quantum meruit, or other cause of action. Regardless of the cause of action asserted, a consumer may raise a defense based upon the reasonable value of goods or services provided.

(f) An action upon a judgment or decree on a consumer debt, including any execution upon the judgment or decree, shall be commenced within five years after the entry of the judgment or decree.

Section 8. (a) A debt collector may not bring suit or initiate an arbitration proceeding against a consumer to collect on a consumer debt without first giving the consumer debtor written notice of the intent to file a legal action at least 30 days in advance. The written notice shall include the name, address, and telephone number of the debt collector, the name of the original creditor, the original creditor's last account number, redacted for security purposes to show only the last four digits, a copy of the contract or other document evidencing the consumer debt, and an itemized accounting of all amounts claimed to be owed.

(b) In any action brought by a debt collector to collect a consumer debt, all of the following materials shall be attached to the complaint:

(1) A copy of the contract or other writing evidencing the original debt, which shall contain a written signature of the defendant or evidence of the debtor's agreement by electronic means in compliance with Section 101(c) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001(c). If the debt arises from a credit card and no document signed by the consumer to evidence liability ever existed, then reasonable verification shall include copies of documents generated when the credit card was actually used, including the disclosures required by 15 U.S.C § 1637(a) and (b).

(2) An itemization of the amount sought, containing all of the following:

a. The amount owed for goods or services or for the lease of goods, or the amount of credit extended.

b. Interest, fees, and charges imposed by the original creditor.

c. Interest, fees, and charges imposed by any debt buyer or other assignee of the debt, if applicable.

d. Attorney's fees.

e. Any other fees, costs, or charges sought or imposed.

f. The amount and date of the last payment by the consumer before default or charge-off, whichever is earlier.

g. Each payment credited to the debt after default or charge-off.

(3) If the action is brought by a debt buyer or other assignee of the debt, a complete copy of the assignment or other writing establishing that the debt buyer or assignee is entitled to collect the debt. If the debt has been assigned more than once, each assignment or other writing evidencing transfer of the interest in the debt shall be attached and authenticated to establish an unbroken chain of ownership or assignment. Each assignment or other writing evidencing transfer of ownership or the right to collect shall contain the original creditor's account number, redacted for security purposes to show only the last four digits, of the debt purchased or otherwise assigned, the date of purchase and assignment, and shall clearly show the debtor's correct name associated with the original account number. The assignment or other writing attached shall be that by which the debt buyer or other assignee acquired the debt, not a document prepared for litigation.

(c) In any action to collect a consumer debt, a failure of the debtor to respond to a request for admissions may not be deemed an admission unless the request is served in accordance with Rule 4 of the Alabama Rules of Civil Procedure upon an attorney for the debtor.

(d) In any action by a debt collector, the complaint shall allege as part of the cause of action that the plaintiff is duly licensed and shall contain the name and number, if any, of the license and the governmental agency that issued it. A debt collector that has failed to obtain the proper license shall be prohibited from bringing any action in the courts of this state to collect a consumer debt.

Section 9. (a) Immediately prior to commencing a legal action to collect a consumer debt, the plaintiff shall undertake a reasonable investigation to verify the current address of the defendant for service of process.

(b) In any action to collect a consumer debt, the plaintiff, at the time of filing with the clerk of the proof of service of the summons and complaint, shall submit to the clerk an envelope properly addressed to the defendant, with first-class postage affixed, together with a written notice. This notice is in addition to the requirement in the Alabama Rules of Civil Procedure requiring service of the complaint and summons on the defendant. This additional notice shall consist exclusively of the following language, or language prescribed by the Alabama Supreme Court that addresses the same topics, in clear type of no less than 12-point in size, in both English and Spanish:

NOTICE OF LAWSUIT

DATE

(NAME OF COURT

COUNTY

STREET ADDRESS, ROOM NUMBER

PLAINTIFF (person suing): ________________________

DEFENDANT (person sued): ______________________

NAME OF ORIGINAL CREDITOR, UNLESS SAME:______________________

CASE NUMBER:_________________________________

ATTENTION: A lawsuit has been filed against you claiming that you owe money for an unpaid credit card, medical, student loan, or other debt. You should expect to get a copy of a document called a "complaint" with a summons. You should go to the courthouse at the above address as soon as possible to respond in writing to the lawsuit. You can ask the clerk's office for a copy of the complaint if you have not received it within one week of this notice.

You may wish to contact an attorney. If you cannot afford an attorney, help may be available from a legal services organization, or the Alabama Bar Association.

If you do not respond in writing to the lawsuit, the court may enter a judgment against you. Once entered, a judgment can be used against you for five years, and your money, including a portion of your paycheck, bank account, or both, may be taken. A judgment will hurt your credit score and can affect your ability to rent a home, find a job, or take out a loan.

There can be other very serious consequences for you if a judgment is entered against you.

It is important that you mail a written response to the clerk of the court which issued the summons and complaint to you and appear at the time and place stated above for any scheduled hearing.

(b) The face of the envelope set forth in subsection (a) shall be addressed to the defendant at the address at which process was served, and shall contain the defendant's name, address, including apartment number, and zip code. The face of the envelope also shall state the appropriate clerk's office as its return address. The face of the envelope may not contain any other markings, including any indication it is an attempt to collect a debt or the name of the plaintiff or original creditor.

(c) The clerk promptly shall mail to the defendant the envelope containing the additional notice set forth in subsection (a). A default judgment may not be entered based on the failure of the defendant to answer unless there has been compliance with this section, and at least 20 days have elapsed from the date of mailing by the clerk. A default judgment may not be entered based on the defendant's failure to answer if the envelope containing the additional notice is returned as undeliverable.

Section 10. (a) Prior to entry of a default judgment or summary judgment against a consumer in any action initiated by a debt collector to collect a consumer debt, the plaintiff shall file the following:

Evidence with the court to establish the amount and nature of the consumer debt. The only evidence sufficient to establish the amount and nature of the debt shall be properly authenticated business records that satisfy the requirements of Rules 901, 902, and 903 of the Alabama Rules of Evidence relating to authentication of records. The authenticated business records shall include all of the following items:

a. The original creditor's last account number, redacted for security purposes to show only the last four digits.

b. The name of the original creditor.

c. The amount of the original debt.

d. An itemization of interest, charges, and fees claimed to be owed.

e. The original charge-off balance, or, if the balance has not been charged off, an explanation of how the balance was calculated.

f. An itemization of post charge-off interest, charges, or fees, where applicable.

g. The date of last payment by the consumer.

h. A statement of the applicable limitations period and the filing date of the case.

i. The amount of interest claimed and the contractual or legal basis for the interest charged.

j. Sufficient information to indicate whether the interest rate exceeded the maximum rate as established in Chapter 8, Title 8, of the Code of Alabama 1975, at any point.

(b) If the plaintiff is a debt buyer, the plaintiff shall file one or more affidavits authenticating the documents listed in subsection (b) of Section 8, signed by a person qualified to authenticate the documents.

(c) In a case involving consumer debt, if the defendant debtor appears for trial on the scheduled trial date, but the debt collector fails to appear or is not prepared to proceed to trial and there is not good cause for a continuance, judgment shall be entered for the debtor dismissing the action with prejudice. The court may award the costs of preparing for trial of the debtor, including lost wages, transportation expenses, and attorney's fees to the debtor.

(d) In any case involving collection of a consumer debt, in addition to the grounds set forth in Rules 59 and 60 of the Alabama Rules of Civil Procedure, the defendant debtor shall be permitted to move to set aside a default judgment under Rule 55(c) of the Alabama Rules of Civil Procedure within the following:

(1) One year after entry of default on grounds of mistake, inadvertence, surprise, or excusable neglect.

(2) Two years after entry of default on grounds of deception, fraud, or misrepresentation by a debt collector or its attorney to a pro se consumer, including a false representation that the case would be dismissed.

(3) At any time after a void judgment is granted, if the motion is made within a reasonable time. For a default judgment, this may be a reasonable time after the discovery of the existence of the judgment or order. For purposes of this subdivision, a void judgment in a case involving consumer debt shall include a case in which the consumer is not the person obligated to pay the debt or is the victim of mistaken identity, identity theft, or fraud by another person who incurred the debt.

(4) At any time for lack of personal jurisdiction, if the debtor was not properly served with notice of the action.

(5) If the provisions of Rule 55(c) of the Alabama Rules of Civil Procedure provide for a time period to set aside a default judgment on a particular basis that is different than the time periods set forth in this section, the longer time period shall apply.

Section 11. (a) In any proceeding to confirm an arbitration award to collect a consumer debt, the party seeking to confirm the award shall plead the following:

(1) The actual terms and conditions of the agreement to arbitrate.

(2) Compliance with Sections 5 through 8.

(b) The party seeking to confirm the award shall attach to its petition:

(1) The agreement to arbitrate.

(2) The demand for arbitration or notice of intention to arbitrate, with proof of service.

(3) Written evidence of the arbitration award, with proof of service.

(c) If the arbitration award does not contain a statement of the claims submitted for arbitration, of the claims ruled upon by the arbitrator, and of the calculation of figures used by the arbitrator in arriving at the award, then the petition shall contain a statement setting forth such items.

(d) The court may not grant confirmation of an arbitration award based on a consumer credit transaction unless:

(1) The party seeking to confirm the award has complied with this section.

(2) The party against whom an arbitration award is sought to be confirmed, either:

a. Attended a hearing before the arbitrator.

b. Signed a writing after the submission to the arbitrator of the claim that is the basis for the arbitration award, agreeing to submit the claim to the arbitrator.

c. Was the subject of a court order compelling arbitration.

(e) A party may seek to confirm an arbitration award in the courts of this state within one year after the award is made. A party against whom an arbitration award is made may seek to vacate the award in the courts of this state within one year after the award is made.

Section 12. (a) If the plaintiff is the prevailing party in any action to collect a consumer debt, the plaintiff shall be entitled to interest on the judgment at a maximum rate of interest equal to the weekly average one-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment. No other rate of interest on the judgment shall be permitted, including the rate provided for in the contract.

(b) If the plaintiff is the prevailing party in any action to collect a consumer debt, the plaintiff shall be entitled to collect attorney's fees only if the contract or other document evidencing the indebtedness sets forth an obligation of the consumer to pay the attorney's fees, and subject to the following provisions:

(1) If the contract or other document evidencing indebtedness provides for attorney's fees in some specific percentage, such provision and obligation shall be valid and enforceable up to but not in excess of 15 percent of the amount of the debt excluding attorney's fees and collection costs.

(2) If a contract or other document evidencing indebtedness provides for the payment of reasonable attorney's fees by the debtor, without specifying any specific percentage, the provision shall be construed to mean the lesser of 15 percent of the amount of the debt, excluding attorney's fees and collection costs, or the amount of attorney's fees calculated by a reasonable rate for the cases multiplied by the amount of time reasonably expended to obtain the judgment.

(3) The documentation setting forth a party's obligation to pay attorney's fees shall be provided to the court before a court may enforce those provisions. The documentation shall include all of the materials specified in Section 8.

(c) If the debtor is the prevailing party in any action to collect a consumer debt, the debtor shall be entitled to an award of reasonable attorney's fees. The amount of the debt that the creditor sought may not be a factor in determining the reasonableness of the award. In the alternative, at the debtor's election, a prevailing debtor shall be awarded the amount of attorney's fees that the plaintiff would have been entitled to collect if the plaintiff had been the prevailing party.

Section 13. (a) Prior to a dispute arising, a written agreement may not waive or have the practical effect of waiving the rights of a party to that agreement to resolve that dispute by obtaining:

(1) Injunctive, declaratory, or other equitable relief.

(2) Relief on a classwide basis.

(3) Punitive damages.

(4) Multiple or minimum damages as specified by statute.

(5) Attorney's fees and costs as specified by statute or as available at common law.

(6) A hearing at which that party can present evidence in person.

(b) Any provision in a written agreement violating this section shall be void and unenforceable. A court may refuse to enforce other provisions of the agreement as equity may require.

(c) Any person who is a party to an agreement that violates this section can bring an action in court to reform such an agreement so that it complies with this act. The party or parties responsible for drafting the offending provisions shall be liable for the reasonable attorney's fees and costs of the person or entity bringing the action if that action prevails or where, after the action is commenced, the parties reform the contract voluntarily.

Section 14. The exemptions of this act shall be available to all residents of this state and shall apply regardless of where the property is located. In the case of a nonresident, the courts of the state shall apply the exempt property laws of the state of most significant contacts of the debtor.

Section 15. The following property of a debtor shall be exempt:

(1) All household goods, including, but not limited to, the debtor's and the debtor's dependents' eating and cooking utensils, bedding, furniture, books, refrigerator, stove, microwave oven, kitchen appliances, necessary provisions, washing machine, clothes dryer, vacuum cleaner, television, yard equipment, and household equipment and tools, and all personal possessions, including, but not limited to, clothing, pets, personal health aids, toys, recreational items, medications, computers or similar electronic devices, and telephones, unless that item is exempt under another subsection. The debtor may exempt one piece of jewelry without regard to value, and additional jewelry up to a value of three thousand dollars ($3,000).

(2) The interest of a debtor in a motor vehicle up to ten thousand dollars ($10,000) in value, or twenty thousand dollars ($20,000) in value in the case of a motor vehicle that has been adapted for special use because of the disability of the debtor or a dependent of the debtor. A levy may be ordered on the motor vehicle of the debtor if the creditor establishes with probative evidence to the satisfaction of the court that the debtor's interest in the motor vehicle significantly exceeds ten thousand dollars ($10,000) in value, or twenty thousand dollars ($20,000) in value in the case of a debtor, or a dependent of the debtor, with impaired mobility.

(3) Tools, books, instruments, motor vehicles, and machines which are or may be used by the debtor in the course of an occupation or in search for employment, except that levy may be ordered if the creditor establishes with probative evidence that the value of the tools of the trade of the debtor exceed fifty thousand dollars ($50,000) in the case of farm tools, equipment, crops, and animals, or thirty thousand dollars ($30,000) in the case of other tools of the trade. The debtor may designate which tools of the trade of less than the applicable amount are exempt.

(4) A burial plot for the debtor or his or her family.

(5) Child support payments paid or payable to or on behalf of the debtor.

(6) All public assistance benefits, unemployment compensation benefits, amounts paid pursuant to the federal earned income tax credit and similar state programs, disability benefits, and workers' compensation paid or payable.

(7) All health insurance, disability insurance, and long-term care insurance policies and medical expense accounts, and payments or benefits therefrom.

(8) Insurance proceeds, a judgment, or a settlement, or other rights accruing as a result of bodily injury of the individual or of the wrongful death or bodily injury of another individual of whom the individual was a dependent or spouse paid or payable to a beneficiary, spouse, or dependent.

(9) Amounts in educational expense accounts and similar types of educational savings accounts not to exceed two hundred forty thousand dollars ($240,000) per beneficiary whether paid or payable.

(10) Exempt benefits and funds, including the exempt portion of wages, which are deposited into an account, without a dollar limitation.

(11) In addition to the funds exempt under subdivision (10) of this section, ten thousand dollars ($10,000) in cash, in a bank account, in accrued interest, in dividends, or in the loan or redemption value of a life insurance policy, or other account of the debtor. In the case of a joint account only the amount contributed by the debtor to the account in excess of this ten thousand dollars ($10,000) shall be available to a creditor.

(12) Proceeds from a student loan are exempt unless the creditor provided educational services to the student. Proceeds from a small business loan are exempt from preexisting debts unless the loan was intended to pay that debt.

(13) Up to ten thousand dollars ($10,000) in other funds or property of any sort designated by the debtor, including additional interests in property already exempted in part under other provisions of this act or other law.

(14) Only the interest of the debtor in property may be subjected to garnishment, attachment, disablement, freeze, seizure, or other creditor's remedy. A person other than the debtor may establish that he or she owns or has an interest in property regardless of the person in whose name it is titled or maintained. The interest of the debtor in a joint bank or similar account shall be based on his or her contributions to the account, as determined by the tracing rules in Section 20 in order to protect the interest of a non-debtor in the account. Each person with an interest in property has his or her own right to the full exemption amount applicable to that type of property.

Section 16. (a) The disposable earnings of a debtor for any week that are less than 80 times the greater of the federal minimum hourly wage prescribed by § 206(a)(1) of Title 29 of the United States Code. This exemption shall be adjusted pro rata for any pay period other than weekly.

(b) If the disposable earnings of the debtor exceed the amount provided by the preceding subsection, no more than 10 percent of disposable income in excess of the amount exempt under the preceding subsection shall be subject to garnishment unless the weekly disposable earnings of the debtor exceed one thousand dollars ($1,000), in which case no more than 15 percent of disposable income is subject to garnishment. The amount not subject to garnishment is exempt.

(c) The amount of the disposable income of the debtor that can be garnished for the support of a person is governed by other law.

(d) If more than one garnishment is served on a garnishee with respect to the same debtor, the garnishment served earliest shall take priority, except that a garnishment for support of a person shall take priority over any other garnishment regardless of the date of service. If a garnishment with greater priority consumes the disposable income that is available for garnishment under the preceding subsections, then no part of the disposable earnings of the debtor shall be garnished pursuant to the garnishment with lower priority.

(e) Notwithstanding Section 14, the protections for earnings set forth in this section apply to all debtors whose physical place of employment is in this state, notwithstanding that the employer of the debtor may have corporate offices or other places of business located outside this state.

(f) A person seeking an order of garnishment of earnings, after obtaining a judgment, shall make the following demand in writing at least 15 days and not more than 45 days before the order is sought by delivering it to the judgment debtor by personal service by the court, by sending it to the judgment debtor by certified mail, return receipt requested, or by sending it to the judgment debtor by regular mail evidenced by a properly completed and stamped certificate of mailing by regular mail, addressed to the judgment debtor's last known place of residence. If the judgment debtor completes, signs, and returns the Payment to Avoid Garnishment form, along with any payment shown as due on the form, within 15 days of the date of mailing of the demand, the person seeking garnishment may not proceed with the garnishment. If the debtor sends the wrong amount, the creditor shall notify the debtor of the correct amount, and shall allow the debtor another 10 days to pay the correct amount. The demand shall be in substantially the following form:

NOTICE OF COURT PROCEEDING TO COLLECT DEBT

Date of mailing or date of service by the court _____

To: _______________

(Name of Judgment Debtor) ________

(Last Known Residence Address of Judgment Debtor)

You owe the undersigned ________ (Name of Judgment Creditor) $_____, (1) including interest and court costs, for which a judgment was obtained against you or certified in the ______ court on _______, payment of which is hereby demanded.

If you do not do one of the things listed below within 15 days of the date of the mailing of this notice or of its service by the court, we will go to court, unless we are otherwise precluded by law from doing so, and ask that your employer be ordered to withhold money from your earnings to pay the judgment. This is called wage garnishment.

YOU CAN AVOID THE WAGE GARNISHMENT BY DOING ONE OF THESE THINGS WITHIN THE 15-DAY PERIOD:

(1) Pay to us the amount due; or

(2) Complete the attached form entitled "Payment to Avoid Garnishment" and return it to us with the payment, if any, shown due on it.

____________

(Name of Judgment Creditor)

____________

(Signature of Judgment Creditor

or Judgment Creditor's Attorney)

__________

__________

__________

(Address of Judgment Creditor)

PAYMENT TO AVOID GARNISHMENT

To: _____________

(Name of Judgment Creditor)

________________

________________

(Address of Judgment Creditor)

To avoid the garnishment of personal earnings of which you have given me notice, I enclose $______________ which is the amount on line (6) to apply toward my indebtedness to you. The amount of the payment was computed as follows:

1. Total amount of indebtedness demanded: (1) $________________

2. Enter the amount of your personal earnings, after deductions required by law and deducting up to 15 percent of the remainder for contributions for health insurance, a medical expense account, a pension, or a retirement account, earned by you during the current pay period, that is, the pay period in which this demand is received by you: (2) $________________

3. (A) Enter your pay period, weekly, biweekly, semimonthly, monthly: $______________

4. (B) Enter the date when your present pay period ends: $_______________

5. If the amount on line 2 is less than one thousand dollars ($1,000) for weekly pay, two thousand four hundred dollars ($2,400) for biweekly pay, two thousand five hundred twenty-eight dollars ($2,528) for semimonthly pay, or five thousand one hundred sixty dollars ($5,160) for monthly pay, enter an amount equal to 10 percent of the amount on line (2); otherwise enter an amount equal to 15 percent of the amount on line 2. (4) $________________

6. (A) The higher of the current federal or state minimum hourly wage is ______ (to be filled in by Judgment Creditor) (You should use the above figure to complete this portion of the form.) If you are paid weekly, enter 80 times the current federal minimum hourly wage; if paid biweekly, enter 160 times the current federal minimum hourly wage; if paid semimonthly, enter 172 times the current federal minimum hourly wage; if paid monthly, enter 344 times the current federal minimum hourly wage:

7. (B) Enter the amount by which the amount on line (2) exceeds the amount on line 5(B).

8. Enter the smallest of the amounts on line (1), (4), or 5(B). Send this amount to the judgment creditor along with this form after you have signed it. If the smallest of the amounts shown on line (1), (4), or 5(B) is zero, sign and return this form but do not enclose payment.

(6) $____________

I certify that the statements contained above are true to the best of my knowledge and belief

(Signature of Judgment Debtor)

__________

__________

__________

Print Name and Residence Address of Judgment Debtor

Section 17. The exemptions provided in Sections 14 and 15 may not be waived in an executory contract or prospectively. Security interests, other than for the purchase price, repair, or improvement of the property, or as a bona fide pawn transaction in which the pawnbroker takes physical possession of the pawned item, may not be taken in exempt property. A purported waiver or grant of a security interest in violation of this section is void and unenforceable.

Section 18. (a) A debtor is entitled to a homestead exemption in his or her residence at the time the residence is acquired.

(b) The homestead exemption may be waived by clear language only in a mortgage or deed of trust agreed to by all the owners of the residence and by the debtor's spouse whether or not the spouse has an ownership interest in the home. It may not be waived in any other transaction. A waiver not permitted by this act is void and unenforceable.

(c) The amount of the homestead exemption is the interest of the debtor in the residence up to the value of the median house price in the metropolitan, urban, or rural area where the residence is situated. The debtor may assert an additional homestead exemption for 50 percent of that amount for the spouse of the debtor and each dependent of the debtor who resides in the homestead, whether or not such spouse or dependent has an ownership interest in the homestead.

(d) The homestead shall attach to a residence, without declaration or recordation, upon its acquisition, whether by purchase, gift, devise, inheritance, or other means. If a debtor has more than one residence, the homestead exemption shall attach to the first one acquired, unless the debtor designates a different residence as his or her homestead, in which case the homestead exemption transfers to the designated residence upon designation.

Section 19. (a) A transferee of property obtained by fraud or theft may not assert that the property is exempt against the transferor or the heirs, devisees, and assigns of the transferor.

(b) The restrictions of this act do not apply in the case of any order for the support of any child or dependent of the debtor or any decree regarding the division of property between spouses or former spouses issued by a court of competent jurisdiction in accordance with an administrative or civil procedure, which is established by state or federal law, which affords substantial due process, and which is subject to judicial review.

Section 20. (a) Money received from the sale or transfer of property that is exempt under this act or other law shall remain exempt for a period of 18 months while in the debtor's possession, in a bank or similar account, in a savings account, in a certificate of deposit with a term that does not extend past the 18-month period, or otherwise held in a manner whereby the money is regularly available to the debtor and is traceable and may be converted into another type of exempt property.

(b) If property, or a part thereof, that could have been claimed as exempt has been sold or taken by condemnation, or has been lost, damaged, or destroyed and the owner has been indemnified therefor, the traceable proceeds of that property are exempt for 18 months after the proceeds are received, and may be converted into another type of exempt property.

(c) Money or other property and proceeds that are exempt under this act or other law are traceable under this section by application of the first-in first-out rule.

Section 21. (a) The dollar amounts in this act change, as provided in this section, according to and to the extent of changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers: U.S. City Average, All Items, compiled by the Bureau of Labor Statistics, United States Department of Labor, and hereafter referred to as the Index. The Index for December of the year preceding the year in which this act becomes effective is the Reference Base Index.

(b) The dollar amounts change on July 1 of each even-numbered year if the percentage of change, calculated to the nearest whole percentage point, between the Index for December of the preceding year and the Reference Base Index, is 10 percent or more, however:

(1) The portion of the percentage change in the Index in excess of a multiple of 10 percent shall be disregarded and the dollar amounts change only in multiples of 10 percent of the amounts appearing in this act on the date of enactment.

(2) The dollar amounts may not change if the amounts required by this section are those currently in effect as a result of earlier application of this section.

(3) Changes in dollar amounts are to be rounded to the nearest whole dollar.

(c) If the Index is revised, the percentage of change is calculated on the basis of the revised Index. If a revision of the Index changes the Reference Base Index, a revised Reference Base Index is determined by multiplying the Reference Base Index applicable by the rebasing factor furnished by the Bureau of Labor Statistics. If the Index is superseded, the Index referred to in this section is the one represented by the Bureau of Labor Statistics as reflecting most accurately changes in the purchasing power of the dollar for consumers.

(d) The Alabama Department of Labor shall adopt a rule to provide the following:

(1) On or before April 30 of each year in which dollar amounts are to change, the changes in dollar amounts required by subsection (b).

(2) Promptly after the changes occur, changes in the Index required by subsection (c) including, if applicable, the numerical equivalent of the Reference Base Index under a revised Reference Base Index and the designation or title of any index superseding the Index.

Section 22. (a) A levy, garnishment, attachment, disablement, freeze, or seizure of property that may be exempt may not be made by a creditor, custodian, court officer, sheriff, or similar officer without a court order reasonably identifying the property and the manner of levy.

(b)(1) Upon entry of a judgment for damages, the clerk shall mail a notice to the last known address of each judgment debtor stating that the judgment debtor is responsible for paying the judgment but that the court will not require it to be paid with exempt income, assets, or property. The address to which the notice is mailed shall be noted in the record. If the notice is returned undelivered, that fact shall also be noted in the record.

(2) At the time the creditor obtains an execution the circuit clerk shall give a notice to the judgment debtor who is the subject of the remedy, to any person in possession of the property involved, and to any person known to the creditor after reasonable inquiry to have an ownership claim to the property involved. The notice shall state the person's right to a hearing to claim exemptions that are not self-executing, to contest the seizure of exempt or necessary property, or to seek to set aside the judgment, and the steps the person may take to assert these rights. If documents are served upon the person in connection with the execution, this notice shall be included with those documents, but otherwise it shall be given by first class mail.

(3) At the time a creditor notifies a person of a debtor's examination, supplementary process, or deposition on the financial affairs of the debtor, the creditor shall also provide a notice that the debtor is responsible for paying the judgment, that the court may not require it to be paid with exempt income, assets, or property, and that the person has the right to a hearing to claim exemptions, to contest the seizure of exempt or necessary property, or to seek to set aside the judgment.

(4) The notices required by this section shall list the most common federal and state exemptions, give examples of income, assets, and property that are commonly exempt, and list sources of additional related information, such as the state's law libraries or the court's website. The notice shall also state that the judgment debtor may file a motion to set aside the judgment and shall list the most common grounds for such a motion, including improper service or active duty military service at the time of the suit.

(c) If an item of property falls into a category that is fully exempt or for which the exemption depends on its value, or an exemption depends on the judgment debtor's designation of the property to which the exemption will apply but the exemption appears to the executing officer to be sufficient to exempt all of the property of the judgment debtor, the executing officer shall so report to the court and the judgment creditor, and may not execute upon it. The property is presumed to be fully exempt unless the creditor requests and obtains a hearing and establishes that the property does not fall into a fully exempt category or includes significant value in excess of the amount exempt, or that the exemption is not sufficient to exempt all of the judgment debtor's property. The creditor must request the hearing within seven days after the report of the executing officer. Notice of the hearing shall be mailed to the debtor and shall describe the steps the debtor may take to contest the creditor's claim as to the value of the property. The debtor may contest the creditor's claim either by appearing in person or through a representative at the hearing, or by filing a written response stating the belief of the debtor of the amount that the property is worth and certifying the existence and amount of any liens or security interests against it, and the court shall consider such a statement as evidence.

(d) If an exemption depends on the judgment designation of the property of debtor to which the exemption will apply, and the exemption does not appear to the executing officer to be sufficient to exempt all of the property of the debtor, the executing officer shall provide the judgment debtor a form and written instructions for designating the property to which the exemption will apply. If the debtor fails to file the designation with the court within seven days, the executing officer shall designate the items that will be exempt. If the debtor files a designation, the clerk shall notify the judgment creditor. The items designated by the judgment debtor are presumed to be exempt unless the creditor requests a hearing within seven days after the clerk's notice and establishes at the hearing that the value of the property exceeds the exemption. The hearing shall be conducted as set forth in subsection (c).

(e) The Alabama Supreme Court shall prescribe notices to garnishees that describe the exemptions applicable to particular types of garnishment. The forms shall instruct the garnishee not to turn over funds or other property that the garnishee can reasonably identify as exempt, but instead to report back that the funds or property are exempt.

(f) If a creditor obtains an execution against a person, the person is entitled to a prompt hearing to claim exemptions, to contest the seizure of exempt property, or seek to set aside the judgment.

(g) If a creditor obtains an execution against property of a person, the person is entitled to a prompt hearing to claim that property levied upon, while not exempt, is of such value to the financial rehabilitation or future support of the debtor or the dependents of the debtor that it should be declared exempt by the court. The court may also order a greater exemption if other exceptional circumstances such as illness, injury, unemployment, death of a family member, disability, or make a greater exemption equitable.

(h) A judgment creditor may serve a subpoena duces tecum or invoke other discovery procedures provided in the Alabama Rules of Civil Procedure upon a person believed to be holding income, assets, or property of the debtor to determine the nature, value, and the availability or exemption of the income, assets, or property for satisfaction of the judgment. Upon a showing of reasonable grounds to believe that the residence of the debtor contains nonexempt items of significant value, the court may order the debtor to make the residence available to the sheriff to levy upon such nonexempt items or to an appraiser to conduct an appraisal of the property.

(i) Costs incurred in making, or proposing to make, a levy on property shall be paid out of the proceeds of a sale of the property if a sale occurs. If the proceeds of a sale of the property are insufficient to cover the costs incurred in the levy, garnishment, or attachment, the creditor shall pay the costs and may not recover them from the debtor or the garnishee, notwithstanding any agreement of the parties to the contrary.

Section 23. An employee may not be discharged or disciplined because of any garnishment.

Section 24. (a) In the case of seizure of property made exempt from seizure by this act, the debtor and his or her dependents may recover the following:

(1) Actual damages, including emotional distress damages.

(2) Statutory damages up to two thousand dollars ($2,000) per exempt item.

(3) A reasonable attorney's fee in connection with the establishing of the exemption and the damages of the debtor.

(b) It shall be a defense to liability under this section if the person shows that the violation was not intentional and resulted from a bona fide error of fact notwithstanding the maintenance of procedures reasonably adapted to avoid the error.

Section 25. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration may not affect the part which remains.

Section 26. All laws or parts of laws which conflict with this act are repealed.

Section 27. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Consumers and Consumer Protection

Courts

Civil Procedure

Creditors