All Roll Calls
Yes: 136 • No: 2
UtahH.B. 3822026 General SessionHouse
Uniform Assignment for Benefit of Creditors Amendments
Sponsored By: Jordan D. Teuscher (Republican)
Signed by Governor
BusinessBusiness EntitiesContracts and ObligationsLegislative OperationsUniform Laws
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
11 provisions identified: 1 benefits, 1 costs, 9 mixed.
Creditors get safeguards and regular reports
Assignees must act loyally, honestly, and with reasonable care to maximize payments to creditors and finish the estate's work. They must keep funds separate, maintain records, meet tax duties, disclose compensation methods, and report at least every six months. Administration expenses are payable only from sufficient assets not pledged to creditors. Assignees can abandon assets when more efficient and skip examining claims that receive little or nothing regardless of validity or priority. Creditors with accepted claims still unpaid in full must receive a final accounting; discharge requires asset distribution and completion of remaining duties.
Investment loss claims rank behind creditors
Beginning May 6, 2026, claims tied to buying or selling the debtor's or an affiliate's securities face lower payment priority. This covers claims to undo a purchase or sale, damages, and related reimbursement or contribution claims. They rank behind claims or interests otherwise equal or senior to the investment; common-stock claims rank with common stock. Agreements setting lower priority remain enforceable when other law allows them.
Creditors can challenge managers and misconduct
Creditors or debtors can seek court removal for misconduct, incompetence, gross mismanagement, legal violations, or creditors' best interests. A qualified successor takes over; departing managers must transfer assets and records and report receipts and payments. Debtors and assignees are not personally liable for each other's acts; representatives are generally protected except for gross negligence or willful misconduct. Assignees remain liable for duty breaches, subject to specified good-faith reliance defenses; unique creditor harm is paid individually, shared harm to the estate. Agreements cannot waive core duties or excuse bad faith or recklessness, but can set reasonable standards, limit other liability, and require estate indemnification.
Creditors get claim reviews and reserves
Properly filed claims must be accepted unless disputed before final payment; unsecured amounts are valued when the assignment starts. Assignees can accept claims received by the deadline without formal proof, or excuse late proof for a reasonable cause. Creditors can request a claim list with privacy safeguards; classes receiving nothing instead receive a no-payment notice. Unresolved disputes require court action before final payment, or the claim must be accepted, with dollar-for-dollar reserves for estimated payments. Claims can be reconsidered for cause, with catch-up payments before further equal- or lower-priority payments; specified reimbursement and contribution claims are barred.
Creditors get notice and filing deadlines
Known creditors must receive notice within 30 days after the assignment takes effect, unless they sign a notice waiver. Assignees must also make reasonable efforts to reach unknown creditors. Creditors must use the stated filing method and a single deadline set 90 to 210 days after the assignment starts. Claims must identify the creditor, amount, debt type, and collateral, with supporting records when applicable and a signature under penalty of perjury. A complete filing serves as initial evidence, accepts Utah court authority, and transfers related rights to challenge improper transfers to the assignee.
Wages and secured debts get payment priority
Beginning May 6, 2026, protected secured claims are paid first from their collateral, minus reasonable preservation and sale costs. Protection requires a perfected lien the assignee cannot undo that is not junior to the assignee's lien; shortfalls become unsecured. Administration costs and federally required priority claims come next, followed by qualifying wages, other priority claims, and ordinary unsecured claims. Wage priority covers earnings within 180 days before assignment or business closure, whichever comes first, capped at the greater applicable bankruptcy or nonbankruptcy priority amount. Equal-ranking claims share shortages proportionally; unexcused late claims receive only leftovers after listed claims are paid in full.
Asset managers gain powers with limits
Unless the agreement limits them, assignees can operate businesses, borrow, hire professionals, sell or lease assets, settle disputes, and invest prudently. These powers must serve their duties; the law also gives them a lien and specified creditor and property-purchaser rights. They can undo certain earlier transfers, but recovery cannot exceed what a creditor could recover, and protected financial contracts face bankruptcy-law limits. Those challenge rights are exclusive against creditors who file claims. Buyers paying value in good faith receive protections against specified claims and subordinate liens, even after assignee noncompliance; other buyers remain exposed.
Cross-state debt assignments reach Utah assets
Utah recognizes out-of-state assignments on issues where the result is substantially similar to Utah law. Other states' amounts help set Utah priority for specified wage and government claims; assignees can also provide another state's creditor treatment. Courts can appoint an eligible out-of-state assignee or nominee to help control or sell assigned Utah assets. After recorded notice, asset holders must turn them over, except creditors with liens or related rights to offset or recoup debts.
Debtors must turn over assets and records
Debtors and their designated representatives must protect and turn over assigned assets and provide needed records and transfer documents. Verified lists of assets, employees, and known creditors are due when the agreement starts or as soon as practical afterward. Debtors must help obtain required consent for restricted transfers and provide representative contact information when reasonably needed. Assignees must record real estate assignments or notices where the property is located and follow other title-transfer laws. Personal-property financing filings are optional, and skipping them does not cancel the assignee's rights.
Independent managers must oversee debt assignments
An assignee generally cannot be a creditor, insider, affiliate, or someone with a financial stake beyond fees and expenses. Affiliates include relationships based on a 20% voting interest; a noncontrolling stake in a publicly traded debtor is allowed. Prior service to the debtor alone does not disqualify an assignee. Both parties must sign an agreement identifying assets, fees, and payment rules, with a sworn statement that all assets are assigned. The transfer starts with the last required signature unless a later date is stated; it includes organizations' later-acquired assets but respects existing interests and transfer laws.
New debt settlement rules for Utah
For assignments made on or after May 6, 2026, Utah replaces its former debt assignment law. This process lets a debtor transfer assets to a manager, called an assignee, to pay creditors outside bankruptcy. It covers individuals whose main home is in Utah and organizations based in Utah or governed by Utah law. It also covers organizations wholly owned by a qualifying debtor. Partly owned organizations qualify when controlled by that debtor, without their own workplace or employees, and dependent on that debtor's services.
Sponsors & Cosponsors
Sponsor
Jordan D. Teuscher
Republican • House
Cosponsors
Michael K. McKell
Republican • Senate
Roll Call Votes
Senate vote • 2/27/2026
Senate/ passed 3rd reading
Yes: 27 • No: 0
Senate vote • 2/26/2026
Senate/ passed 2nd reading
Yes: 26 • No: 0
Senate vote • 2/24/2026
Senate Comm - Favorable Recommendation
Yes: 6 • No: 0
House vote • 2/18/2026
House/ passed 3rd reading
Yes: 69 • No: 1
House vote • 2/9/2026
House Comm - Favorable Recommendation
Yes: 8 • No: 1
Actions Timeline
Governor Signed
3/23/2026House/ to Governor
3/12/2026HouseHouse/ received enrolled bill from Printing
3/12/2026HouseHouse/ enrolled bill to Printing
3/5/2026HouseEnrolled Bill Returned to House or Senate
3/5/2026Draft of Enrolled Bill Prepared
3/3/2026Bill Received from House for Enrolling
3/3/2026House/ signed by Speaker/ sent for enrolling
2/27/2026HouseHouse/ received from Senate
2/27/2026HouseSenate/ to House
2/27/2026SenateSenate/ signed by President/ returned to House
2/27/2026SenateSenate/ passed 3rd reading
2/27/2026SenateSenate/ 3rd reading
2/27/2026SenateSenate/ passed 2nd reading
2/26/2026SenateSenate/ 2nd reading
2/26/2026SenateSenate/ placed on 2nd Reading Calendar
2/25/2026SenateSenate/ committee report favorable
2/25/2026SenateSenate Comm - Favorable Recommendation
2/24/2026Senate/ to standing committee
2/20/2026SenateSenate/ 1st reading (Introduced)
2/19/2026SenateSenate/ received from House
2/18/2026SenateHouse/ to Senate
2/18/2026HouseHouse/ passed 3rd reading
2/18/2026HouseHouse/ 3rd reading
2/18/2026HouseHouse/ 2nd reading
2/10/2026House
Bill Text
Enrolled
3/5/2026
Introduced
1/26/2026