Arizona judge throws out restraining order against Prop 209, designed for medical debt relief

(MGN)
Published: Dec. 23, 2022 at 10:54 AM MST
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PHOENIX (3TV/CBS 5) -- A Maricopa County judge has denied a challenge to Proposition 209, which is designed to give medical debt relief to tens of thousands of Arizonans.

Officially called the “Predatory Debt Collection Protection Act,” the bill says it is meant to protect “household goods and bank accounts, plus family vehicles,” from those trapped with thousands of dollars of medical bills. The measure lowers the maximum interest rate from 10% to 3%, and issues protections for property from being seized or garnished. After the law goes into effect on Jan. 1, 2023, only 10% of a person’s disposable wages will be subject to garnishment.

Arizonans wildly supported the measure with a final result of 72% in favor to 28% opposed in the 2022 election. A judge ruling issued on Thursday, Dec. 15 officially dismissed the challenge out of court.

The Goldwater Institute joined with the Arizona Creditors Bar Association, a strong opposer to the piece of legislation, and filed a temporary restraining order earlier this month. Opponents, primarily those from the debt collection industry and business chamber of commerce, said that the initiative could lead to higher costs for everyone else and that lenders may be less inclined to offer financing for elective and other medical treatment.

How will it impact Arizona consumers?

Some advocates say it's a huge win for consumers, protecting them from predatory debt collectors, but the business community isn't so sure.

On Your Side’s Susan Campbell spoke with business advocates who say the law will have unintended consequences in the medical industry. They say that placing limits of medical debt collection will affect those who likely need it the most. Low-income consumers and those with less cash on hand will likely have a harder time obtaining the treatments they might need.