Find Collection Agencies in California | Debt Collection Laws

Debt collection laws of California

Debt collection laws in California are a combination of federal laws and state-specific regulations. Keep in mind that laws change over time, so it’s important to verify this information with the most current sources or consult a legal expert.

1. Fair Debt Collection Practices Act (FDCPA): This is a federal law that sets the standard for how debt collectors can act. It prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts from you. For instance, they can’t call you before 8 am or after 9 pm (your local time), unless you’ve agreed to it. They also can’t harass you, make false statements, or engage in other unfair practices.
2. California Fair Debt Collection Practices Act (Rosenthal Fair Debt Collection Practices Act): In addition to the FDCPA, California has its own set of debt collection laws, known as the Rosenthal Act. This law mirrors the FDCPA but expands its protections to include original creditors, not just third-party debt collectors. It prohibits creditors from engaging in deceptive, harassing, or abusive practices in the collection of consumer debts.
3. California Consumer Credit Reporting Agencies Act: This state law regulates credit reporting agencies and the information that can be provided to them by debt collectors. It requires debt collectors to inform consumers, in writing, before they report a delinquency to a credit reporting agency.
4. Statute of Limitations: California has a statute of limitations for debt collection. As of 2021, the statute of limitations for written contracts is 4 years, and for oral contracts, it’s 2 years. This means that after this period, the debt is considered “time-barred,” and the creditor cannot sue you for the debt.
5. Protection of Exempt Income: Certain types of income such as social security benefits, disability benefits, and some types of retirement income are generally exempt from garnishment in California.
6. Wage Garnishment Laws: If a creditor has obtained a judgment against a debtor, the creditor may be able to garnish the debtor’s wages to collect the debt. However, there are limits to how much can be garnished.
7. Consumer Privacy: California has strong consumer privacy laws. The California Consumer Privacy Act (CCPA) allows consumers to have more control over personal information that businesses collect about them. This includes information that may be collected by debt collectors.
8. California collection laws give debtors many protection and options if an agency breaks the law.
9. California Fair Debt Buying Practices Act (“FDBPA”) protects consumers whose debt has been sold to a debt buyer.
10. There are proposals like California is SB1286 proposed in August 2024, in which commercial debts will have several additional protections, similar to consumer debts. There are also bills like SB 1061 that may remove medical debt completely from credit reports.

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws 

Please note that laws can change, and new laws can be enacted. It is always advisable to consult with a qualified attorney or legal expert for the most current information and guidance regarding debt collection laws in California or any other legal matter.

California Debt Statistics

• California had the highest average debt per household, at $71,470 as of 2018
• Californians owed $133 billion in student loan debt. Average Student Loan in California in 2019: $37,468.
• According to TransUnion, the average mortgage debt in California was $334,925 in 2016.
• The average credit card debt in California as of 2018 is $10,496
  An average Californian had an auto loan balance of $18,324 as of 2016
• There were 80,391 bankruptcy  filings in 2015
• Californians had an average credit score of 661.4 in 2015

California Geographical Stats

• Population in California: 39.2 million (year 2021)
• Number of millionaires: 1.14 million  ( year 2021)

California debt collection agencies can collect all across the state, including these cities Los Angeles, San Diego, San Jose, San Francisco Bay Area, Fresno, Sacramento, Long Beach, Oakland, Bakersfield, Anaheim, Santa Ana, Riverside, Berkeley, Santa Rosa, Glendale, Modesto, Sunnyvale, Stockton, Fontana, Irvine, San Bernardino and Fremont.

Collection agencies in California can assist medical practices, small businesses, banks, schools and financial institutions in recovering money on past due bills and prevent writing off as a 100% loss. The best approach is to check for its online Google and BBB reviews.

Source:
https://www.courts.ca.gov/9618.htm
https://oag.ca.gov/consumers/general/debt-collectors
https://www.usa.gov/debt
https://www.sfgate.com/technology/businessinsider/article/The-average-credit-card-debt-in-every-state-13141232.php
https://www.bankrate.com/loans/auto-loans/table-the-rise-in-auto-loans-across-the-us/
https://www.valuepenguin.com/average-credit-card-debt
https://www.debt.org/faqs/americans-in-debt/consumer-california/