State Bill Would Stop Debt Collectors From Emptying Bank Accounts

KQED – Farida Jhabvala Romero

A state bill that would prevent debt collection agencies from completely emptying a person’s bank account to reclaim debts, may also provide some relief to people who are mistakenly targeted by collectors, sometimes because identity thieves rack up debt in their names.

The state assembly is expected to vote on the bill today as the the legislative session ends.

SB 298, by Sen. Bob Wieckowski (D-Fremont), would automatically exempt up to $2,250 per debtor from bank levies — that’s when a judge gives a creditor approval to seize money from an account.  More than 100,000 bank levies are served every year statewide, according to research by the East Bay Community Law Center.

Currently, creditors can seize 100 percent of the money in a person’s account. The new bill wouldn’t cancel anyone’s debt, but Wieckowsk says it could give low-income Californians relief while they repay what they owe.

“People won’t be evicted from their homes or apartments because their funds have been wiped out,” Wieckowski said.

The bill could also help people like Sharon Randall, who have money collected from their accounts to settle debts that aren’t even theirs.

In 2014, Randall went to her regular Bank of America branch to withdraw money from her account. But she discovered her account was empty. The teller said a collection agency had put a levy on her account. Randall, a single mom, was left penniless.

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