Medical debt collectors barred from wiping out Californians' bank accounts

A new California law signed by Gov. Gavin Newsom prohibits collection agencies from wiping out bank accounts to pay medical debts.

"People who are living paycheck to paycheck need the protection that this bill will provide to give them more financial security," said Sen. Bob Wieckowski, who authored the legislation. "We do not want people living on the streets because debt collectors, who don't have the greatest track record for accuracy, claim someone owes an old debt."

Mr. Wieckowski says the legislation doesn't erase debt, but "gives people the ability to pay rent, medical expenses and other daily costs while they pay down or contest the debt."

Agencies will be required to leave $1,724 in a consumer's bank account. Mr. Wieckowski said this amount is the lowest possible for a family of four to live in urban California, as determined by the state's social services department.

Read the full text of the bill here.

 

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