Borrower Protection: Ban on Clauses Waiving Right to Court Defense
New law prohibits credit and loan agreements from including clauses that allow creditors to obtain a court judgment without notifying the debtor or allowing them to defend themselves. This means individuals and small businesses taking on debt will retain their right to be heard in court in case of a dispute.
Key points
Prohibits clauses in credit agreements that force borrowers to give up their right to notice and a court hearing.
Ensures borrowers, including small businesses, retain their right to defend themselves if sued over a debt.
The changes apply to various forms of debt, including loans and sales of future income.
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