April 10, 2020
Collection Industry Organizations Support Protecting Stimulus Payments from Garnishment
Three collection industry organizations, the Commercial Law League of America, International Association of Commercial Collectors, and the Commercial Collection Agencies of America, all support any action to protect the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“CARES Act”) stimulus payments to individuals from garnishment. Leadership of all three organizations recognize the extent of the economic crisis and the impact the pandemic has had on our whole economy, but most particularly on small businesses and individual consumers. While many of our members and clients are small business owners who have been significantly impacted by the economic crisis, we agree that the CARES Act stimulus payments should be used by individuals for basic living expenses. We join the recommendation that any stimulus payment paid to an individual under the CARES Act be deemed as exempt from execution, and recommend that the Treasury Department code the individual’s stimulus payment as a federal benefit to ensure it is protected. READ MORE
March 30, 2020
Federal Government Resources for CLLA Members
If your state has received the necessary disaster designation, SBA’s Economic Injury Disaster Loan Program can provide low interest loans in this difficult time. A streamlined application process is now available at https://covid19relief.sba.gov/#
Information on administration and processing for the expanded SBA 7(a) loan program which is part of the CARES Act, which passed on Friday, March 27, 2020, is not yet available. Those loans are to be processed by approved SBA lenders. Your current bank or lender is the best current source for this information, as it becomes available. CLLA Board of Governors member Ted Hamilton, Esq. has published a summary of the CARES Act which may be of assistance in digesting the voluminous law.
Linked below, state specific programs may be available, including state disaster assistance available in:
March 28, 2020
Massachusetts Bans Consumer Debt Collection for 90 Days
On March 27, 2020, the Attorney General of Massachusetts announced an enacted emergency regulation making consumer debt collection unfair and deceptive under the State’s Consumer Protection Act. The regulation is effective until the earlier of ninety (90) days or the end of the state of emergency declared by the Governor of Massachusetts. The State’s existing debt collection regulations and other applicable laws remain in effect.
March 27, 2020
Senate Passes Coronavirus Stimulus Bill: New Bankruptcy Amendments
Rolling Meadows, IL – March 27, 2020 – Early on the morning of March 27th, the Senate passed the CARES Act. The bill goes to the House of Representatives where it is expected to pass by unanimous consent. The President is expected to sign the bill.
The bill has some key provisions dealing with bankruptcy, which include the following:
First, the newly enacted Small Business Reorganization Act of 2019 (Chapter 13 for small business) will see an increase in the eligibility threshold from $2,725,625 to $7,500,000.
Second, the definition of ‘income” in the Bankruptcy Code for Chapter 7 and 13 will exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy. This provision affects the means test calculation.
Third, “disposable Income” for purposes of confirming a Chapter 13 plan shall not include coronavirus related payments.
Fourth, Chapter 13 debtors may seek plan payment modifications, if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.
These provisions will sunset in one year.
Finally, there would be a six month repayment holiday with respect to student loans.
There are also discussions on Capitol Hill that the next phase of COVID19 relief may including expanding the dollar limits for Chapter 13 eligibility. The League is also watching to see if dischargeability of Student loans, an increase in Trustee Commissions and the elimination of credit counseling may work its way into future legislation.
March 27, 2020
CLLA Legal Update: Coronavirus Response Act
Rolling Meadows, IL – March 27, 2020 – Effect of Families First Coronavirus Response Act (FFCRA)H.R. 6201. The United States Congress and the President passed the second coronavirus response act in mid-March of 2020. It passed as House Resolution 6201. (Herein “The Act”) The Act became law on March 18, 2020 amid the Coronavirus outbreak in the U.S. This Act poses dramatic changes to small businesses and sole proprietorships throughout the Country including law firms and collection agencies. It goes into effect on April 3, 2020. Almost all Small Businesses in the U.S. will feel the effects of this law over the next few months.
This Article will provide a brief overview of the Act. It is not intended to be relied upon for a complete analysis of specific applications of the Act in all circumstances. Part of this Act included the Emergency Family and Medical Leave Expansion Act. This EFMLEA Act extends family and medical leave during the a Public Health Emergency to all employers who employ under 500 employees. The current threshold for family and medical leave is any business over 50 employees. As a result, all small businesses and sole proprietorships must now give Family and Medical Leave of up to 12 weeks for Coronavirus related causes. These causes include the following:
- Subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine related to COVID-19;
- Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- Is caring for an individual subject to a quarantine order or in self-quarantine;
- Is caring for a child whose school or place of care is closed for reasons related to COVID-19;
- Or is experiencing any other substantially-similar condition specified by the Secretary of HHS.
Duration of Leave:
For reasons (1)-(4) and (6) a Full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible the number of hours of leave that the employee works on average over a two-week period.
For reason (5): A Full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
CALCULATION OF PAY
For Leave reasons (1),(2), or (3): employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
For leave reason (4) or (6); employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
For leave reason (5); employees taking leave shall be paid at 2/3 their regular pay or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period- two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave). The first 10 days of leave are unpaid. After 10 days the Employer “shall provide paid leave for each day of leave taken after the 10 day unpaid period. The employee may then take 12 weeks of paid leave at 2/3 of the regular rate of pay not to exceed 200 per day or 10k in the aggregate.
GETTING IT BACK
The Employer receives a Tax credit against payroll taxes for each calendar quarter up to an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter. Should the payroll tax amount paid the employer on a quarterly basis not be sufficient to cover the amount paid under the act, the Employer treats the amounts paid as not covered by payroll taxes as a credit against estimated income taxes on taxes. Of course, this does not deal with the fact that there may be extensive losses due to the Virus outbreak. This entire provision sunsets on December 31, 2020.
February 21, 2020
Commercial Law League of America Advocates For Passage of The Bankruptcy Venue Reform Act of 2019 (H.R. 4421)
Rolling Meadows, IL – February 21, 2020 –On February 20, 2020, the National Association of Attorneys’ General (NAAG) announced its official support for passage of The Bankruptcy Venue Reform Act of 2019, pending in Congress as H.R. 4421. https://www.congress.gov/bill/116th-congress/house-bill/4421
Forty-Two (42) attorneys’ general signed a letter asking Congress to pass H.R. 4421 because:
“As state attorneys general, we are charged with guarding our states’ financial interests, enforcing consumer protection laws, protecting our citizens from environmental contamination, and combating wrongdoing in whatever form it takes. These duties are difficult enough to carry out when corporations file bankruptcy and claim to be financially unable to comply with their legal obligations. The difficulties are multiplied when bankruptcy law allows those debtors to seek relief in distant jurisdictions where the debtors have found rulings that are friendlier to their interests than to those of persons and agencies located far away who will have difficulty affording to appear and be heard.”
The NAAG’s press release and the letter from the 42 state attorneys’ general are available here: https://www.naag.org/naag/media/naag-news/attorneys-general-support-bankruptcy-venue-reform-act-of-2019.php; https://www.naag.org/assets/redesign/files/sign-on-letter/NAAG%20Support%20Letter%20-%20HR%204421.pdf.
The Commercial Law League of America has consistently advocated for bankruptcy venue reform and is the nation’s leading organization on this issue. On February 24, 2020, the CLLA and its members will be in DC on the Hill advocating for Congress to pass H.R. 4421. They will also be seeking corrective changes to recently enacted Small Business Bill (28 USC Section 1409(b)) relating to the jurisdictional provision for preferences, and opening discussions on discharging student loans utilizing the CLLA’s proposal to amend the statute to define hardship using the criteria from other statutes. To learn more about the CLLA’s 7th Annual Capitol Hill Day, please see here https://clla.org/wp-content/uploads/2020/2020HillDay/2020-Hill-Day-Web.pdf.
Join the CLLA by becoming a member here: https://clla.org/membership-benefits/.
February 20, 2020
Commercial Law League of America Announces 2020 President’s Cup Recipient
Rolling Meadows, IL – February 20, 2020 – The Commercial Law League of America, has named B. Emory Potter, Partner, Hays, Potter & Martin, LLP, as the 2020 President’s Cup award recipient. Emory Potter is a construction, commercial and civil litigation attorney with extensive trial experience.
His specialties include material man’s lien practice, bond work related to construction, creditors’ rights, and commercial collections, handling a large volume of litigation from initiation of suit through post-judgment collection. He has worked on all aspects of lien law, state bond claims, and Miller Act claims. Since 2009, Mr. Potter has acted as a Special Master for the Superior Court of Fulton County where he is asked to assist the Court with property disputes, quiet title actions, and other matters that the Court deems warrant special attention. READ MORE
January 29, 2020
Commercial Law League of America Announces Three Additional Certified Agencies
Rolling Meadows, IL – January 29, 2020 –The Commercial Law League of America (CLLA) is pleased to welcome into the esteemed group of Certified Agencies, Convergent Commercial Inc., White Plains, NY; Greenberg, Grant & Richards, Inc., Houston, TX; and Windham Professionals, Inc., Salem, NH. These organizations demonstrate that their agency adheres to relevant regulations in the collection of commercial debt, use generally accepted accounting practices and follow standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal. READ MORE
January 28, 2020
Commercial Law League to Host 7th Annual Capitol Hill Day in Washington, D.C.
Rolling Meadows, IL – January 28, 2020 –The Commercial Law League of America will be conducting its seventh legislative event in Washington D.C. on February 24, 2020. CLLA held its first D.C. Legislative Day in February of 2014 and has since found success in building relationships with legislators and regulators and in forming relationships with other likeminded organizations. READ MORE