This bill adds special protections for servicemembers and their families against abusive debt collection. It says debt collectors cannot threaten to get someone demoted, take away a security clearance, or have them punished under the Uniform Code of Military Justice just to make them pay a debt. These rules cover active-duty members, selected reservists, certain dependents, and people within one year after leaving service. Debt collectors can still share accurate, legal information about a debt, but not make those threats. The bill also labels it an unfair practice to claim that refusing to “cooperate” will cause a rank reduction, a clearance loss, or military prosecution .

The bill directs a federal watchdog to study how these changes affect timely delivery of information to servicemembers, military readiness, and national security, including how uncollected debt might affect people with security clearances .

• Key points
  • Who is affected: Active-duty servicemembers, certain dependents, selected reservists, and recent veterans (within 1 year of separation) .
  • What changes: Debt collectors cannot threaten rank reduction, loss of clearance, or military prosecution; claiming those outcomes for not “cooperating” is also banned. Sharing accurate, lawful debt info remains allowed .
  • When: If enacted, these new rules would be added to the Fair Debt Collection Practices Act; a government study would follow to review impacts .