Inquiry: “Hi, does a creditor have to take me to court to obtain a judgement against me in California? What gotchas should I be aware of? Please help me. Thank you so much. Gratefully, Tim”
Response: The federal and California fair debt collection practices statutes, and the debt collection tort law, combine to promote reasonable, honest and fair debt collection practices by establishing enforceable minimum standards of conduct for debt collection.
A discussion of California debt collection practices can be found at the California Department of Consumer Affairs; and at the California Office of the Attorney General. To see the California Civil Code for fair debt collection practices, click the Rosenthal Fair Debt Collection Practices Act.
Effective January 1, 2014, California has a new Fair Debt Buying Practices Act requiring debt collectors to verify consumer debts sold or resold on or after January 1, 2014. The collector of that debt must verify the obligation before making an written statement to the consumer to collect on that debt. In the first written communication with the consumer, the collector must inform the consumer of their right to make a written request for information regarding the debt, such as a copy of the contract or other document evidencing the consumer’s agreement to the debt (which includes the most recent monthly statement recording a purchase transaction). Thereafter, the collector must provide the requested information within 15 days or it must cease collections until it gets the information.
The California Code of Civil Procedure applies to judgments and what a collector has to do to procure a judgment. In pertinent part, if the collector sues, the complaint must make certain allegations and attach a copy of the contract or other document evidencing the consumer’s agreement to the debt. (See Section 581.) Consumers may sue collectors who violate this law for statutory penalties of $100 to $1,000, and can bring a class action if applicable. They may recover reasonable attorney’s fees and costs so there are many California lawyers who will take such cases on a contingency basis.
This article was originally published on September 16, 2009. It has been revised and republished on May 13, 2014.