A cadre of debt collectors are seeking to repeal Proposition 209, a ballot measure which sets limits on interest rates for medical debt and increases exemptions for debt collection.

The complaint, filed by the Arizona Creditors Bar Association, a debt collection law firm, two homeowners’ associations and three private debt collection companies, alleges the passage and recent enactment of the proposition creates, “fatal confusion,” for attorneys and debt collectors.

They are seeking to repeal the law in its entirety, though their main complaint lies with the lack of clear timeline provided in the proposition.

David Hameroff, a litigant in the case and debt collection attorney, wrote in a declaration that he fears the proposition drafters’ “unfamiliarity with the debt collection industry,” will provide “more confusion than clarity for those who regularly practice.”

The Arizonans Fed Up with Failing Healthcare political action committee, with significant labor union backing, campaigned for Proposition 209 and saw it passed with 72% support from voters.

Proposition 209 reduces the maximum interest rates on medical debt from 10% to 3% annually, increases value of exemptions for certain property and earnings and adjusts values yearly with the cost of living.

Debt exemptions values jumped from $250,000 to $400,00 for homes, from $6,000 to $15,000 for household furnishings and $6,000 to $15,000 for motor vehicles.

Asset exemptions for individuals or their dependents with physical disabilities rose from $12,000 to $25,000.

The amount of money protected in a bank account increased from $300 to $5,000 and disposable earnings subject to debt collection changed to 10% or 60 times the minimum wage, whichever is less.

Proposition 209 took effect on Dec. 5 and provides the act would apply “prospectively,” but litigants say confusion persists in where and when the new law would apply with debt judgments in progress.

For a debt collector to garnish wages or bank accounts, they must obtain a court order to direct funds from employers or a person’s bank to the collector.

Contracts, garnishments and judgments are at issue in the collectors’ case. They claim the new law creates a blind spot in where the new law and old law would apply with pending cases in progress.

A judge granted the temporary restraining order requested by the litigants, providing some clarity in the meantime.

The order holds the new law does not apply to contracts entered into before Dec. 5, post-judgment enforcement actions occurring after Dec. 5 given a pre-Proposition 209 contract and non-contract judgments where underlying debt accrued before Dec. 5.

Though the main complaint in the filing is with the timeline, the group wants the act voided in its entirety for vagueness and unintelligibility, alleging violations of the 1st and 14th Amendment, and a section of the Arizona Constitution.

“If not completely invalidated (it should be), the court must provide the parties with specific guidance that Prop 209 does not,” the filing reads.

The complaint claims, “Prop 209 effectively makes a substantial amount of the outstanding debt in Arizona uncollectable because many judgement debtors’ assets are no longer reachable.”

Litigants filed the suit against the State of Arizona. Arizonans Fed Up with Failing Healthcare, the political action committee behind Proposition 209, intervened in the case.

An evidentiary hearing is set for Dec. 16.