BILL NUMBER: SB 641	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 8, 2015

INTRODUCED BY   Senator Wieckowski

                        FEBRUARY 27, 2015

   An act to add Section 1788.61 to the Civil Code, relating to debt
buying.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 641, as amended, Wieckowski. Debt buying: default judgment.
   (1) Existing law, the Fair Debt Buying Practices Act, regulates
the practice of buying charged-off consumer debt, as defined, sold or
resold on or after January 1, 2014, for collection purposes and
prescribes the circumstances pursuant to which the debt buyer may
bring suit. The act prohibits a court from entering a default or
other judgment in an action initiated by a debt buyer against a
debtor unless business records, authenticated through a sworn
declaration, are submitted by the debt buyer to the court to
establish the facts required to be alleged, as specified.
   This bill would permit a debtor to serve and file a notice of
motion and motion to set aside a default or default judgment and for
leave to defend an action relating to debt, if service of a summons
did not result in actual notice to the debtor in time to defend an
action brought by a  3rd party  debt buyer and a
default or default judgment has been entered against the debtor in
the action. The bill would require a debtor to make this service and
filing within  6 years after entry of the default judgment or
 180 days of the first actual notice of the  action.
  action, whichever is earlier.  The bill would
prescribe requirements for the filing, which would include an
affidavit submitted to the court under oath and that the party's lack
of actual notice in time to defend the action was not caused by his
or her avoidance of service or inexcusable neglect. By expanding the
crime of perjury, the bill would impose a state-mandated local
program. The bill would permit a court to set aside the default or
default judgment on whatever terms as may be just and allow the party
to defend the action. The bill would  state that its
provisions  apply to  all consumer debt, regardless
of the date it was sold.   a judgment entered on and
after January 1. 2010. 
   (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1788.61 is added to the Civil Code, to read:
   1788.61.  (a) Notwithstanding Section 473.5 of  the  Code
of Civil Procedure, if service of a summons has not resulted in
actual notice to a debtor in time to defend an action brought by a
 third party  debt buyer and a default or default
judgment has been entered against the debtor in the action, the
debtor may serve and file a notice of motion and motion to set aside
the default or default judgment and for leave to defend the 
action within   action. The notice of motion shall be
served and filed within   the earlier of:  
   (1) Six years after entry of the default or default judgment
against the debtor. 
    (2)     Within  180 days of the first
actual notice of the action.
   (b) A notice of motion to set aside a default or default judgment
and for leave to defend the action shall designate as the time for
making the motion a date prescribed by Section 1005 of the Code of
Civil Procedure, and it shall be accompanied by an affidavit showing
under oath that the party's lack of actual notice in time to defend
the action was not caused by his or her avoidance of service or
inexcusable neglect. The party shall serve and file with the notice a
copy of the answer, motion, or other pleading proposed to be filed
in the action.
   (c) Upon a finding by the court that the motion was made within
the period permitted by subdivision (a) and that debtor's lack of
actual notice in time to defend the action was not caused by his or
her avoidance of service or inexcusable neglect, the court may set
aside the default or default judgment on whatever terms as may be
just and allow the party to defend the action.
   (d) This section shall  not be limited by the time period
specified in Section 1788.50 and shall be applied to debt buyers with
respect to all consumer debt, regardless of the date it was sold.
  apply to a default or default judgment entered on or
after January 1, 2010. 
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.