An Act of the Sovereign People of Bontrant
Proposed: Moonblossom 32nd, 800 A.V.
Date of Magical Ratification: Not yet voted
Vote Summary:
Shall an original creditor be restricted from selling or assigning personal debt to a third-party collection agency or buyer if the debt is not officially in a state of default as per the terms and conditions initially agreed upon by the debtor and the original creditor?
Preamble:
Whereas the nation of Bontrant is founded upon principles of fairness, transparency, and the sanctity of good-faith agreements; and Whereas the citizens of Bontrant who diligently strive to meet their financial obligations deserve protection from the unexpected and potentially disruptive sale of their personal debts to third-party entities when they are not in breach of their agreements; and Whereas it is the expressed will of the sovereign people of Bontrant, through its unique democratic and magical process, to ensure stability and predictability in creditor-debtor relationships;
Therefore, be it enacted by the unified voice of the people of Bontrant as follows:
Article I: Definitions
For the purposes of this Act:
- “Personal Debt” shall refer to any financial obligation, or alleged obligation, incurred by an individual citizen of Bontrant primarily for personal, family, or household purposes, including but not limited to loans, credit extensions, and service agreements.
- “Original Creditor” shall refer to the individual, business, corporation, or any other entity that initially extended the credit or to whom the Personal Debt was originally and directly owed under the terms of the initial agreement.
- “Third-Party Collection Agency or Buyer” (hereinafter referred to as “Third-Party Acquirer”) shall refer to any individual, agency, corporation, or any other entity, distinct from the Original Creditor, that purchases, is assigned, or otherwise obtains or attempts to obtain the legal right to collect on a Personal Debt.
- “State of Default” shall refer to the specific condition wherein a debtor has verifiably failed to meet one or more material payment obligations or has breached other critical covenants as explicitly defined and stipulated within the original Terms and Conditions of the Personal Debt agreement. A debtor shall not be deemed in a State of Default for minor, unintentional, or technical deviations from the agreement if such deviations have been previously waived, consistently tolerated by the Original Creditor without formal written notice of breach and demand for cure, or do not materially impair the Original Creditor’s rights.
- “Terms and Conditions” shall refer to the legally binding written (or otherwise formally recorded and mutually accepted) agreement established between the debtor and the Original Creditor at the inception of the Personal Debt, clearly outlining all duties, obligations, payment schedules, interest rates, fees, and specific conditions that constitute a State of Default.
Article II: Restriction on the Sale or Assignment of Non-Defaulted Personal Debt
- An Original Creditor is hereby strictly prohibited from selling, assigning, conveying, or otherwise transferring any Personal Debt, or any rights thereto, to any Third-Party Acquirer if the debtor associated with the said Personal Debt is not, at the time of the proposed sale or transfer, officially and verifiably in a State of Default as defined in Article I, Section 4, and according to the original Terms and Conditions specified in Article I, Section 5.
- The burden of proof to establish that a debtor is in a State of Default prior to any sale or assignment of their Personal Debt shall rest solely with the Original Creditor. Such proof must be documented and maintained by the Original Creditor.
- Any clause within an original Personal Debt agreement that purports to grant the Original Creditor the unconditional right to sell or assign the debt to a Third-Party Acquirer, irrespective of the debtor’s payment status or standing, shall be considered subordinate to this Act and unenforceable in cases where the debtor is not in a State of Default.
Article III: Consequences of Unlawful Transfer
- Any purported sale, assignment, or transfer of Personal Debt executed in violation of Article II of this Act shall be deemed null, void, and without legal effect within the jurisdiction of Bontrant.
- In the event of such an unlawful transfer, the Personal Debt shall legally remain an obligation owed solely to the Original Creditor, under the original Terms and Conditions, as if no such transfer attempt had occurred.
- A debtor whose Personal Debt has been unlawfully transferred may not be pursued for said debt by the purported Third-Party Acquirer. The debtor shall retain all rights and defenses against the Original Creditor as per the original agreement and the laws of Bontrant.
Article IV: Scope and Applicability
- This Act shall apply to all Personal Debt agreements active within the jurisdiction of Bontrant from the date of its magical ratification and to all future Personal Debt agreements created thereafter.
- This Act does not preclude an Original Creditor from engaging a third-party entity for the purposes of debt servicing (such as payment processing or communication) on behalf of the Original Creditor, provided that the ownership of the debt and the ultimate creditor-debtor relationship is not transferred away from the Original Creditor while the debtor is not in a State of Default.
Article V: Magical Ratification and Enactment
- This Act, reflecting the undeniable and unified will of the sovereign people of Bontrant, is hereby affirmed and magically ratified.
- This Act shall take immediate effect upon its inscription into the Great Civic Record of Bontrant, binding all citizens, residents, and entities operating within the dominion of Bontrant.
Article VI: Precedence
This Act shall take precedence over any prior customs, private agreements, or lesser edicts that conflict with its provisions.
So decreed and sealed by the Collective Will of Bontrant, this .. day of .., in the year …