Consumer debt: charged-off debts.

Existing law places various requirements on, and prohibits certain actions by, debt buyers with respect to charged-off consumer debts.

This bill would prohibit a charged-off consumer debt from being sold or assigned more than one year after the debt was charged off. The bill would require a charge-off creditor to notify the consumer when the creditor sells or assigned a charged-off consumer debt to a debt buyer.

Existing law prescribes various time periods for the commencement of actions other than for the recovery of real property, including within 4 years for an action upon any contract, obligation, or liability founded upon an instrument in writing, as specified.

This bill would prohibit an action from being brought to recover a charged-off consumer debt on or after the date that is the earliest of specified dates. The bill would prohibit a debt buyer from bringing an action to recover a charged-off consumer debt after one year from the date the debt was charged off.