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Frequently Asked Questions About Debt Collection in California

Q: What Legal Actions Can a Debt Collection Attorney Take in California?

In California, a debt collection attorney can take several legal actions to collect debts. These actions are governed by both state and federal laws, including the Fair Debt Collection Practices Act (FDCPA) and the Rosenthal Act. Key legal actions that a debt collection attorney can undertake or initiate include:

1. Filing Lawsuits: Attorneys can file lawsuits against debtors for unpaid debts, leading to the entry of a judgment which can then be enforced in various ways. 
2. Wage Garnishment: Once a judgment is obtained, garnishment of a judgment debtor’s paycheck or the paycheck of his or her spouse, can be implemented to have monies deducted directly from the debtor’s paycheck to pay the judgment.
3. Bank Levies: Similar to wage garnishments, bank levies allow collection attorneys to take money directly from the debtor’s bank accounts.
4. Property Liens: Collection attorneys can place liens on a debtor’s property, such as homes or cars, which must be paid off to clear the title in the event that the property is transferred or refinanced.
5. Repossession: If the debt is related to an asset, such as an equipment lease, repossession and seizure of the property may be an option.

Q: How Long Does a Creditor have to sue on a debt in California?

The duration of the debt collection process in California varies based on the specifics of each case, but there are general timelines that can be considered. 

• California’s statute of limitations for breach of written contracts, such as loan agreements, purchase agreements and promissory notes, for example, is four years from the date of the breach which is typically from the date of the last payment or charge on an account. 
• For oral contracts, the statute is two years from the date of the breach. 

This statute of limitations defines the maximum time a party has to take legal action. After this period, a creditor cannot sue. It’s important to note that specific state laws may apply depending on the financial institution involved. For example, some credit card companies may follow the laws of the state where they are headquartered, which might have a different statute of limitations​​. Working with an experienced debt collection attorney is essential. 

Q: Information Required to Initiate a Debt Collection Case

To initiate a debt collection case in California, your collection attorney will typically want to have the following information about the debtor:  

• Full name
• Contact details
• Address. 

Additionally, detailed information about the debt itself is required, such as: 

• The original amount
• Any payments made
• The current balance owed
• The date of the last payment
• The basis for the debt (e.g., breach of promissory note, loan agreement, etc.). 

Documentation supporting the existence and terms of the debt, like contracts or account statements, is also essential. The exact requirements may vary based on the type of debt and the specific circumstances of each case.

Q: Debts that form the basis for Collection actions in California

To pursue collection actions, the Collections Attorney will be looking for and assessing whether the debt is based upon a written contract or an oral agreement.  In either case, the documentation that supports the claim will be essential to whether the Collections Attorney can proceed with filing a lawsuit to recover the debt.  It is essential to be aware of the different statutes of limitations that apply to claims for different types of debts. Working with a knowledgeable debt collection attorney will help you navigate this process and more.