California Collection Laws

What are California's laws regarding wage garnishment, levy, lien, foreclosure, and payday loans?

A collection agent is threatening to sue me. My questions is, what can they do? Garnish my wages? Seize my car? Take my 401(k)? I live in California.

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Highlights


  • California allows wage garnishment and bank account levies.
  • The California statute of limitations on credit card debt is four years.
  • Consult with an attorney to learn more about your rights and liabilities.

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, and a lien on the debtor’s property. A creditor that is granted a judgment is called a “judgment-creditor.” Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

In California, the following cited laws are found under the Code of Civil Procedure unless specified.

California Wage Garnishment Law

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

n most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

California allows wage garnishment (CCP § 706.010-706.011). In general, California follows the federal rules for the amount of a garnishment, which allows up to 25% of a worker’s wages to be garnished. For exemptions, CCP § 706.05 and § 703.010-703.150 define earnings and what is considered exempt. Municipal and state employees may be garnished. See the Bills.com resource California Wage Garnishment additional discussion on wage garnishment.

See the Dept. of Labor’s Employment Law Guide - Wage Garnishment and the Dept. of the Treasury's Answers About Garnishments.

Generally, 401(K) or other retirement funds are exempt from garnishment. It is advisable to have those funds deposited into a separate bank account if you are concerned about garnishment on those benefits.

Levy Financial Accounts

A levy means that the creditor has the right to take whatever money in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.

In California, a levy or attachment, is allowed under Section 699.510-699.560. Levy is allowed if the plaintiff possesses a legal instrument known a writ commanding the levying officer to seize and sell as much of a debtor’s property as is necessary to satisfy a creditor’s claim. See Section 700.010-700.200 for specifics.

If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

California Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay the judgment.

California allows a lien for a money judgment. Under Section 697.510-697.670, mechanics and contractors (and similar laborers and professionals) have the right to place a lien on real property (697.310 through 697.410) or personal property (697.510 through 697.670). This also includes creditors for unsecured debt (credit cards, auto loans, et cetera), see Civil Procedure Code Section 697.010-697.060. Exemptions are covered under Section 704.010-704.210. A lienholder on a residence may not foreclose. However, if a lienholder of personal property may demand the sheriff seize the property and auction it to satisfy the lien.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

California Writ of Replevin

Replevin means an action for recovering goods wrongfully taken or detained. Four California statutes cover replevin. One concerns the recovery of public records from a private party. A second concerns recovery of property before the commencement of civil litigation (Civil Procedure Section 512.010). A third concerns a post-judgment writ of possession (Section 712.010), and the fourth concerns the repossession of a manufactured home, a mobile home or real property (Sections 1166a, and 712.010 et. seq.). The fourth is usually applied when a landlord seeks to eject a tenant from a property.

California Statutes of Limitations

Each state has is own statute of limitations. Under California law, the statute of limitations is governed by Section 335-349.4. The statute of limitations on an open account (i.e., credit card) is 4 years, written contracts 4 years, real property actions 5 years, foreign judgments are valid for 10 years, and domestic judgments are valid for 10 years (and can be renewed at 10 years).

ollection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

California Foreclosure

For information on California foreclosures, see Bills.com article Is My HELOC a Recourse or Non-Recourse Loan in California? for a discussion of the differences between recourse and non-recourse loans. See also Mortgage Debt and Community Property to learn how California’s community property laws affect foreclosure.

California foreclosure laws are found in Civil Code Section 2920-2944.7. To learn more about the rules surrounding foreclosure in this state, including deficiency balances see CP Section 580d and Section 2938(e)(3).

California Payday Loan Collection

See the Bills.com resource Payday Loans to learn how California Civil Code Section 1789.30-1789.38, and specifically Section 1789.33, protects consumers of payday loans. Defaulting on a payday loan is not a crime in California, and collection agents suggesting the contrary are misinformed.

California Repossession Rules

The repossession agency must notify the borrower by mail or in person within 48 hours after repossessing a vehicle.

The seller or holder must give 15 days’ notice of intent to sell a repossessed vehicle to all persons liable on the contract (CC §2983.2(a)), except when the vehicle was seized by a public agency, such as a car seized by the police for transporting illegal drugs (CC §2983.3(b)(6)).

The notice of intent to dispose of a repossessed vehicle must advise all persons liable on the contract of their rights to redeem the vehicle, reinstate the contract, request a 10-day extension of the redemption and reinstatement periods, and request a written accounting of the disposition, and must give notice of the borrower’s possible liability for a deficiency judgment. (CC §2983.2(a)(1)–(9)). The seller must provide a full accounting for the disposition of the vehicle to any person liable on the contract on written request or if there is a surplus. (CC §2983.2(b)–(c))

California Collection Agency Law

Collection agents need not be licensed in California. The California Fair Debt Collection Practices Act (CFDCPA) is sometimes referred to as the Rosenthal Fair Debt Collection Practices Act (RFDCPA). The CFDCPA mirrors the FDCPA in most respects, with two exceptions. The first is original creditors are covered by the CFDCPA. By contrast, the FDCPA covers all collection agents and, in some circumstances, original creditors.

The CFDCPA’s second difference concerns how collection agents must use the legal process. California collection agents must:

  • Serve you with notice of a lawsuit when it sues you. If it gets a default judgment because it failed to serve you with a lawsuit notice, it may not collect on that judgment.
  • Sue you in the county where you either:
    • Incurred the debt
    • Lived when you incurred the debt, or
    • Live now
  • Not send you a document that appears to have been issued, authorized, or approved by a government agency or attorney when it wasn’t.

Violation of the CFDCPA may be a criminal misdemeanor. If you have been victimized by a collection agency, file a report of the violation with your local city or county district attorney or prosecutor. Consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. These laws are found in California Civil Code § 1788.

Recommendation

Consult with a California attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in California. See also the State of California Dept. of Consumer Affairs document Collecting or Satisfying the Judgment for more information about California’s collection laws.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

66 Comments

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  • 35x35
    Nov, 2012
    Luis
    Im a bit confused as to how much can be garnished from California residents? I was employed with a company who did their own book keeping and was being garnished for child support $369.00 bi weekly and debt 0f $11,000.00 that was paid off in a little over a year. I was making $15.00 an hour with 40 hour weeks and my take home pay was $436.00 bi weekly?? I addressed the issue with supervisor/owner/book keeper and she stated that per California state law two places can garnish from my check at the same time up to 75%??? Is this information correct, please help thanks.
    0 Votes

    • 35x35
      Nov, 2012
      Bill
      Your employer is wrong, wrong, wrong, unless the garnishments are related to delinquent child support payments or tax debt.

      If your wage garnishments are related to child support, then up to 60% of your wages can be garnished. Child support-related wage garnishments have priority over other wage garnishments. In other words, they immediately go to the front of the line if there are other wage garnishments in effect.

      Let us assume for the sake of argument the two wage garnishments were from judgment creditors, and were not related to child support or taxes. Under federal law (the Consumer Credit Protection Act Title 3) and California statute (CCP § 706 et seq.) only the amount greater than $217.50 per week may be garnished where the disposable earnings are $290 per week or less. You mentioned your take-home pay (which the law calls "disposable earnings") is $436 every two weeks. I will assume you work about the same number of hours per week. According to my math, your disposable earnings are $218 per week. This means $1 per pay period can be garnished from your pay check.

      Acquaint your employer's payroll person with Wage Garnishment: A Guide to Understanding Court-Ordered Wage Garnishment and Your Options to understand California's rules, and the Dept. of Labor's The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title 3 (PDF) to learn the federal rules.
      0 Votes

  • 35x35
    Oct, 2012
    Jack
    Is it safe for someone with severe debt to purchase property in their own name? I have some $50,000 in debt which has been delinquent over 4 years now. It's mostly from credit cards but there is some student loans, medical and misc. All of the debt was accrued in California, though I currently reside and work out of state. According to my credit report there was a judgment filed for $25k in Dec of 2008 by a credit card company and there are five different collection agencies listed who have made "Account Review Inquiries" as recently as yesterday. That said, I've never actually been bothered by creditors, possibly because I didn't fill out a W-2 for several years or because my mailing address and phone number was inconsistent. Now... I'd like to purchase a small piece of vacant land (not in California) and I'm concerned that if I put my name on the deed someone will come after it. The full market value of the property is listed at $6,700 but the selling price would be over $20,000. There would also be another name on the deed. Could a collection agency put a lien on the property if my name is on the deed? How would that work? Are they likely to do so for property valued at that amount? Thanks ahead of time for your help. The service you provide here is invaluable. Not only is the information clear and thorough, it is very comforting. Your tone isn't judgmental or condescending, which is a huge relief when dealing with an issue that often carries such shame. Thank you, Bill. z/s
    0 Votes

    • 35x35
      Oct, 2012
      Bill
      I can't give you legal advice, as only an attorney can properly do so, but I will share a few thoughts.

      A creditor with a judgment against you could obtain a lien that would encumber the property you buy. If they become aware of your ownership, through some public records search, for instance, it seems reasonable to expect a lien to be filed.
      0 Votes

  • 35x35
    May, 2012
    Alex
    I recently found out that there was a lawsuit and lien judgement against me in Los Angeles for a credit debt. However, I was never served and did not go to court because I was unware of the suit. Additionally, this debt was about to exceed the california statute of limitations, so the attorney office representing the original credit company submitted the suit right before the SOL. I would like to buy a home now. Does this lien affect the purchase of a home in Los Angeles? Or would I only be affected if I tried to resell the home?
    0 Votes

    • 35x35
      May, 2012
      Tiffany
      I only know this because I talked to about 5-10 different lenders and if you have a public record on your credit file you will not be able to get a loan for a home. My husband had a judgement against him and it was reported on only one of his credit reports and we weren't able to get financed (we live in So Cal) so luckily for us his fell off after the ten years and they didn't renew it. But the lenders we talked said we would have had to pay it and then go through the courts to get it show as paid. Hope this helps :)
      0 Votes

    • 35x35
      May, 2012
      Bill
      The company was within its rights to file suit against you before the SOL expired. In fact, in most states a creditor can even sue you after the SOL has passed, though you can use the SOL as an affirmative defense. In your situation, the lawsuit being filed before the SOL expired negates you using the SOL to protect yourself.

      This matter could be a big problem for purchasing a home, depending on when the judgment shows up on your credit report and how the debt is now reported. As things currently stand, you may have to pay off the collections account to qualify for a mortgage loan, depending on the size of the debt and its age. If it goes to the point where a judgment appears, it is almost certain that lenders would require you to satisfy the debt before they would approve your application. You also want to avoid a judgment, if possible, to avoid the harm it will cause to your credit score.
      0 Votes

  • 35x35
    Jan, 2012
    Kimberley
    We purchased our home in 1992 for $189450. Right now after 19 yrs its valued at $285000. At the time of the crash when people lost jobs and homes, my husband lost his job and I became disabled. Our payments then where $2080.00 Plus and equity line or $75000 at $400.00. Needless to say we could not pay either one. So for the next year and half we made no payments to either one. My husband found a job. We tried working out a mod with the second loan, they would not do it. BOA was willing to,so after 3 years we have a modified loan at $1437.00 a month. BoA took the 13 or 14 mo we didnt pay and added them to our loan, at a 40 yrs, at 3%. As for the Equity line,Citibank,by now it was with a collection compay, continually adding interest and late charges everymonth with the total now at $87000! They refuse to take anything less than $300 a month(we cant do it) My question is...are they allowed to keep adding interest and late charges once it goes to a collection agency? Is there a statue of limitations on collections of this loan? My fear is, I really dont know if we will ever be abel to pay it, I had to retire, his job is much less than the one that closed up. We barely make ends meet, how can we meet all of our obligations?
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Most likely the loan was called in and late charges and rates were taken on the full balance of the loan. Regarding the legality of the charges on your home equity loan, you will need to refer to your loan agreement versus the statements sent to you. The collection agency will be able to charge interest rates, pursuant to your agreement, but not more than allowed by state law. The $300 charge most likely covers interest only. The creditor is not interested in a negative amortization. Since you already lowered your first mortgage to the lowest available limit, there is not much left to do in terms of lowering your mortgage payments. Since it sounds as if you have positive equity in the house, your best solution, may be to negotiate a lower pay off with the creditor, and sell the house.
      0 Votes

  • 35x35
    Jan, 2012
    Jason
    My brother and I owned a condo in Florida. We currently reside in California. Due to our financial situation, we were forced to quit making payments on our HOAs and our mortgage for our FL property (that was for 2 years our primary residence), in order to pay for food and other life necessities. We sold our property in a short sale in January 2011. Our first and second mortgage lender wrote off our loan balance. The HOA association was paid approximately 1/3 of the balance of unpaid HOA dues at closing of the short sale. Our real estate agent, that facilitated the short sale for us, represented to us multiple times via email and calls that he "got the HOA to settle for the what we paid them at closing". We can forward email chains with the agent for verification of the fact that we understood the payment to be a settlement in full. However, fast forward to now and the HOA is claiming that they gave our agent an estoppel letter during the short sale that says that the money paid to them at closing is only to allow the property to sell for the short sale (basically we're paying them off so they'll release their claim on the property to let it sell on the short sale) and now they are asking us to pay them the entire balance of delinquent dues. We were never shown the estoppel letter, never agreed to it and never signed it. Given it's ridiculous assumption (i.e that nothing paid at closing would be a credit and that this is not a full settlement) we would never have agreed to it, had it been shown to us. Furthermore, in May of this year, the court filed a notice "Dismissing Case, Cancelling Foreclosure Sale, Cancelling Notice of Lis Pendens, Setting Aside Final Summary Judgment and directing Clerk to return original loan documents and to substitute photostatic copies in the court file- hereby dismissed, cancelled, set aside directed and substituted. Clerk Close File." We feel that there is no merit whatsoever to the HOA's claim that we owe them money, that we fully settled at closing and furthermore, the judge dismissed any outstanding claim they make think they have against us. We'd like to know if we have anything to worry about and if so, how to protect ourselves from the HOA association (which is based in Florida) trying to come after us as California residents. Thanks in advance for your assistance and advice. It is greatly appreciated.
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      I cannot estimate your liability without reading the HOA's letter sent to the real estate agent, or the notice you mentioned that the court filed. Your safest course of action is to hire a Florida lawyer to research the issues you mentioned, including locating the crucial HOA's letter to your agent.
      0 Votes

  • 35x35
    Jan, 2012
    Diana
    My dad, 56 yrs old just passed away and had a $250,000 life insurance. My mom is the beneficiary. There are 3 kids including myself and we are all over 18. My moms wants to file for bankruptcy because they were in a lot of debt and foreclosed on their home. Is this money protected from creditors? Would she be better off giving me the insurance money and just paying the taxes on it-rather than losing it to pay for creditors. She ultimately wants the money to give to me and my siblings. Help!  We are in California.
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Before your family starts gifting any insurance benefits or taking other financial actions to avoid the decedent's creditors, consult with a California lawyer who has probate experience. With the understanding that I know nothing about the decedent's estate, your mother may have zero liability for your father's debts. On the other hand, she may have liability for some debts, and not others. A probate lawyer will answer your questions, including if bankruptcy is a smart option.
      0 Votes

  • 35x35
    Dec, 2011
    Daniel
    My wife has medical bills in excess of $30,000 from our first daughter being born in 2005. his still shows on her credit report but to date she has not been sued and it appears several different collection agencies have attempted to collect. Since it has been 6 years, the first step would be to dispute this on her credit report? or to send a letter to the collection agencie(s) that the SOL is up and to stop sending these letters? what to do?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      I recommend that you the read Bills.com article about medical bills in California and statute of limitations. A derogatory item will stay on your credit report for 7.5 years from the date of first delinquency. This is not an indication that the SOL is valid. Even if the SOL has expired, the creditor can still pursue a court judgment, and you will have to claim that the SOL has expired as an affirmative defense. The SOL does not begin to run when the debt was first created, but when the last payment was made. In some states, a SOL can be reset when some other event occurs, such as acknowledging the debt. I do not recommend contacting the collection agency, except through a debt validation letter.

      Since you are dealing with a large sum of money, I recommend that you speak with a local attorney to help determine the validity of the debt and the SOL.
      0 Votes

  • 35x35
    Dec, 2011
    Mdoc
    Hello. I just got a letter from a law firm regarding a debt. I was thinking the SOL has passed, but I checked my credit report and it states that that particular credit card was 30 days overdue Feb 2008. So I'm just shy of the 4 year mark (I reside in California). My question is what I should do as of now. Should I submit a DV? If so should I wait til the 30 days nears? Or should I not send one and just sit tight and cross my fingers? From the document, it is a collection agency that hired this firm and not the original creditor who I borrowed from. Thanks.
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      First, look at your own records to learn when you can prove to a court when the date of first delinquency took place. Why? The information published by the consumer credit reporting agency may be incorrectly reported by the collection agent or original creditor either though accident or design.

      Second, by all means validate the debt. As you mentioned, you have 30 days after notification of the first collection notice to request validation. There is no down-side for a consumer to validate a debt. The upside, on the other hand, is tremendous if the collection agent cannot validate the debt.
      0 Votes

  • 35x35
    Nov, 2011
    Hello! I made a loan to an associate in 2009. Payments on the loan were to have begun in January 2010, but to date, only $1240 has been paid. I am in the process of drafting a Letter of Demand in order to begin legal processes against the person I loaned the money to. Under the terms of the promissory note, the loan was guaranteed with property - specifically restaurant equipment. Unfortunately, the person I made the loan to has now sold the business, so the equipment is no longer in his possession. I would like to start looking at placing a lien on the equipment or at garnishing the payments the new owner's payments to the person I made the loan to. Is there a process I can begin personally, or is contacting an attorney my next best step? My thanks for your assistance!
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      While there is nothing legally preventing you from suing your associate on your own, I strongly recommend that you seek legal help, if the total debt is greater than the small claims cut-off in your state.
      0 Votes

    • 35x35
      Nov, 2011
      Amber
      The original loan amount is well over the California small claims cut off. Thank you. I will seek counsel.
      1 Votes

  • 35x35
    Nov, 2011
    Vanessa
    Hi, my boyfriend has been receiving a number of calls regarding a car loan he had back in 2000. The car was actually forfeited back to the credit company by his grandmother (his co-signer) because he was no longer able to make the payments. There seems to have been a law suit on them both in 2003 but he never heard of anything until now. They are threatening to garnish his wages if he does not come to some agreement. Is the statue of limitations over? How can he avoid them garnishing his wages?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      Your statement "...seems to have been a law suit on them both in 2003..." gives me pause. Does the creditor have a judgment against your friend? Your friend's credit report may offer a clue if the judgment (assuming it exists) was reported to the consumer credit reporting agencies (the credit bureaus). If the judgment appears on his credit report, then there is part of your answer. If the judgment does not appear, then it may exist but was never reported.

      Assuming your friend is a California judgment-debtor, then the statute of limitations for a judgment is 10 years. Consult with a lawyer who has consumer law experience to learn more specifics about your friend's rights and liabilities.
      1 Votes

    • 35x35
      Nov, 2011
      Vanessa
      I checked on our city court site and it shows that they (friend and grandmother) had a civil suit against them in 2003. I am not sure if his grandmother was aware of it, but he was not and has never been contacted until now. I have checked his credit report and there is no mention of that creditor there. Also, if he were to file bankruptcy would it clear this issue up as well?
      0 Votes

    • 35x35
      Nov, 2011
      Bill
      A lawsuit and a judgment are two different things. A lawsuit can be dismissed, or go to trial. If there is a trial, the court may find in favor of the plaintiff or the defendant, or dismiss the case altogether. If a creditor files breach of contract case against a defendant and wins, the court may award the plaintiff a judgment. With the judgment in hand, the creditor can use one of the remedies allowed by the state, and can include a wage garnishment, account levy, or lien. Therefore, the key issue the defendants need to learn is whether the creditor obtained a judgment against them.

      Bankruptcy is a strong tool, but it is not the only one in a lawyer's toolbox. Bankruptcy can wipe out some judgments, but not all. Consult with a lawyer who has bankruptcy experience to learn if the parties have a judgment, and if bankruptcy is the right tool.
      0 Votes

  • 35x35
    Nov, 2011
    Patricia
    The bank froze my checking and savings accounts. I called and they said it was a legal action due to a court order. I found out from the bank that it was a collection agency called Cach LLC. I know nothing about a court order however I have blocked a few phone numbers belonging to a collection agency as they called me repeatedly many times per day at all hours, and at work and rarely left a message. What can I do?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      Contact the collection agency that has the judgment and placed the levy, sometimes called an account garnishment or account freeze, on your account and negotiate a settlement to your debt. In some states, the judgment-creditor is limited to the amount that can be levied. See the Bills.com resource Collection Laws & Exemptions to learn more about the laws in your state.
      0 Votes

    • 35x35
      Nov, 2011
      Patricia
      Thank you!
      0 Votes

  • 35x35
    Oct, 2011
    Amber
    My husband have moved and I have lost my job which in result we no longer are able to afford my vehicle payment anymore. We are thinking of doing a voluntary reposession. I am aware there will probably be Deficiency Balance. So in that case, will I have the opportunity before judgement, garnish wages talk comes around, to set up a payment plan with the debt collector or will it by pass straight to a judgement case?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Creditors will almost always welcome an out-of-court settlement that avoids the time and expense of a lawsuit, and so on.
      0 Votes

  • 35x35
    Sep, 2011
    Richelle
    I was served a summons for Capital One vs myself in December 2010 for breach of contract. The SOL was up April 2011. I have to re-submit an answer to an amended summons. Can I use SOL? since it's after April 2011 or is void since they filed before then? Thank you
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      If the facts you related are accurate, the plaintiff filed its action before the statute of limitations ran out. Even though we are, today, passed the statute of limitations, that affirmative defense is not available to you because the plaintiff got to the courthouse before time ran out.

      My advice? Double-check all of your facts to make sure the statute of limitations really expired when you think it did.
      0 Votes

  • 35x35
    Aug, 2011
    B.
    So I have a medical bill from 2008 and I wanted to know when is the limitations on that up? Would it be next year 2012? and what would i have to do?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Please read about medical debt in CA and the SOL. The SOL runs and once reached, your legal requirement to pay the debt is over, if you have not been sued for the debt before it runs out. A collector could still try to collect after the SOL is passed, but you can refuse to do so and use the SOL as a defense.
      0 Votes

  • 35x35
    Aug, 2011
    KIMBERLY
    I have a friend who lost their home to foreclosure, but who filed wrongful foreclosure suits against the lenders. The home was auctioned and the new owners obtained UD. He tried to get the cases consolidated, but was denied so the wrongful suit is still pending, but the UD was heard and went against him. He now wants to file a lien against his own property in the state of California. I tried explaining that they would simply dismiss the lien, but he feels that it would stand. What do you know about this kind of lien?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Kimberly, I have not heard of this kind of lien being successful. Your friend has no judgment on which to base his claim for a lien against the property.

      He should consult with a lawyer, if this is an avenue he wants to pursue.
      0 Votes

  • 35x35
    Aug, 2011
    Tollece
    In 1997 my husband and I made two vehicle purchases. We divorced in 1999. I kept one vehicle and he kept the other. The vehicle I kept I paid off in full. The vehicle he kept was repossessed in 1999. On Aug 24, 2011 I received a demand letter from a debt collector in the amount of $19,467.00. When I called they told me that they were collecting for my ex husbands vehicle debt, and since he had no assets they elected to go after me. His vehicle was repossessed in 1999. Hasn't the SOL run out on this dept? If so why are they threatening me with wage garnishment? Also can they even go after me since we each got a vehicle in our divorce?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      I can't give you legal advice, as only an attorney can give you legal advice. I will, however, will share some thoughts with you.

      An agreement between you and your spouse about how to divide the marital assets in your divorce isn't binding on a third party. Therefore, the repo debt could result in you ending up on the hook for the debt.
      The SOL point you raise is quite reasonable. Unless a judgment were already obtained, the SOL should have long passed.

      I have a suspicion that this is a junk debt collector, one that may specialize in trying to get people to pay on expired debt. Do a search online for the collectors name and see if you find information that supports my suspicion.

      A debt collector can't garnish your wages. The only way the debt can lead to a garnishment is if you are sued and a judgment is entered against you. If you were sued, I believe that you could raise the SOL defense and avoid any responsibility for the debt.

      The collector's threats are very likely empty ones, but intended to intimidate you into paying. I would send the collector a cease and desist letter, if there is no judgment in place already, were I in your shoes.
      0 Votes

  • 35x35
    Aug, 2011
    Cynthia
    In Apr, 2004 I had a judgment issued against me by Retailers National Bank (now known as Target National Bank). I only had a $4,600 credit limit but the judgment was issued for $60,000! Retailers (Target) has not made any other attempt to collect the debt from me in the 7 years since. In 2008 I filed for Chapter 13 bankruptcy and all creditors were included in my initial payment plan submitted to the court, including Target. They were scheduled to be paid $5,100 which was much closer to what I had owed to them. Target never filed a proof of claim and so they were not included in the final payment plan accepted by the court. I think that any unsecured credit card debt will be discharged when my bankruptcy is discharged. However, can Target (Retailers) still attempt to collect the debt owed in the judgment even if they did not file a claim? That was their chance to get paid. And is there any way to obtain a home loan for a first home with the judgment on my credit report? I have paid all bills on time for over 5 years and have made all Ch 13 payments on time for over 3 years. I am also willing to pay the judgment if Target is willing to settle for an amount much closer to the original $5,000. I am worried that they will ask for something closer to the $60,000 judgment and that is not financially feasible for me now, as it wasn't 7 years ago.
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Consult with your bankruptcy lawyer about specific questions relating to your chapter13 plan. Do not have any communications with the creditor you mentioned without consulting with a bankruptcy attorney first. You risk reinstating your entire liability for that debt by attempting to negotiate a settlement with that creditor outside of the bankruptcy process. As you mentioned, that creditor slept on its rights, and now it must face the consequences for its inaction.

      I realize your long-term goal is to clean up your credit report so that you can qualify for a home loan. You mentioned the judgment was seven years ago. You have three years before the judgment falls off your credit report. I recommend you continue with your chapter 13 plan, and focus on saving what you can over the next three years so that you have a large down payment when you start your home shopping. Housing prices are low today, and they will probably remain at this level for the next three years. Interest rates will probably stay at this level for the foreseeable future too.
      0 Votes

  • 35x35
    Aug, 2011
    Andrea
    Hi, My husband and I lost our home last year and have a $61K HELOC that is left unsettled. We also have over $35K in credit card debt. We were considering bankruptcy, but own our own business, the business value is over the allowed exempt amount. Our lawyer says we can't file for BK, so we should just write letters telling our creditors to stop contact. He says we'll then have to wait out the statute of limitations and hope there's no judgments. He says they may just let the SOL run out. However, if the creditors do take us to court to sue, he says he'll represent us and try to get a settlement at about 25% of total owed amount. This sounds at the least risky and at the most fishy. What is your advice?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      What your lawyer described is known as debt settlement. It has a risk, which your lawyer described to you, but it is a common strategy.
      0 Votes

  • 35x35
    Jul, 2011
    mel
    I have a payday loan company harassing AT WORK for a payday loan that is over 3 years old. Is this legal? Is not my statue of limitations already expired?
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      I can't give you legal advice. You need to speak with a licensed attorney to get legal advice, but I will share a few thoughts with you.

      Payday loans may be considered written contracts in some areas, so you should know the statute of limitation for written contracts in your area. In some cases, because a check is left with the lender that then bounces, the length of collection SOL is governed by the hot check law.

      It is a violation of the Fair Debt Collections Practices Act for a debt collector to keep calling you at work, if your employer prohibits it. You need to let the collector know that your employer doesn't allow such calls, if that is indeed the case. Here is a sample work harassment letter you can use.
      0 Votes

  • 35x35
    Jul, 2011
    Larry
    I received a judgment against me in a California court in 2005 from Circuit City. The debt is over $10,000. I have heard nothing from C.C. since this time. What are the possibilities of C.C. seizing my bank account or garnishing my wages at this time? Not sure if it matters but C.C. filed bankruptcy in 2008.
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      Someone likely has the right to collect on that judgment, as it was an asset in the Circuit City bankruptcy. However, it could have been lost in the shuffle.

      Until the judgment expires, it is possible that your bank account or wages could be levied. In California a judgment lasts for 10 years. A judgment can be renewed, too, but it seems unlikely the judgment-creditor would renew the judgment if there had been no effort to collect from 2005 to 2015.
      0 Votes

  • 35x35
    Jun, 2011
    Vanessa
    My ex owes close to $50k in child support and my child is only 7. He is self employed and an has since remarried. They purchased a house in the wife's name only. Is there any way to get a judgement and put a lien on the property? he will be up to $100k in the next few years at this rate.
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      You have heard the phrase, "The devil is in the details," which is certainly true here. If your ex-spouse lives in a community property state, you may be able to reach the community property your ex-spouse shares with his present spouse. Consult with a lawyer in your spouse's state of residence to learn what rights you have regarding his community property.
      1 Votes

  • 35x35
    May, 2011
    daria
    I'm being contacted about a credit card that has not been used since 2003. They say its in litigation and they will summon me to court to pay it off. weird is weird cause 2 years ago i was contacted by someone else saying they would sue me if i didn't pay. I paid over 600 dollars than. so me being contacted again is really frustrating. and i tried contacting the last company and they no longer exist. this is really frustrating. need help big time.
    0 Votes

    • 35x35
      May, 2011
      Bill
      Validate the debt. You may be dealing with a fake debt collector.
      0 Votes

    • 35x35
      May, 2011
      daria
      i never recieved letters just phone calls. and they have my social security number and address.
      0 Votes

  • 35x35
    Apr, 2011
    Justin
    I live in California and just found out my bank account was frozen by a judgment creditor from NY. I called them and they told me they had send me numerous letters to a NY address. I have not resided in NY for over 20 years. I have no clue what to do. How do I start the process of trying to unfreeze my acct?
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      Yours is not the first message to Bills.com where the plaintiff's law firm could not find the debtor's current address and contact information, but low and behold, when it comes time for a wage garnishment or account levy, then all of a sudden the contact information becomes current. It is a mystery how this happens so consistently, but I digress.

      Consult with a California lawyer who has experience in civil litigation. He or she needs to file motion to vacate the judgment against you for failure of the plaintiff to give you adequate notice of the lawsuit.
      0 Votes

  • 35x35
    Apr, 2011
    Bud
    California SOL is 4 years written and 2 years verbal. If a creditor has not validated the debt with a signed credit card agreement and just has copies of your statement. Isn't this a verbal agreement or is this a written agreement? I have a collector who is suing based on a debt from about 3 1/2 years ago. It's almost 4 years. But I know they don't have a written signed agreement because every time I have asked for it they can't provide one just some random statement.
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      See the discussion in the Bills.com resource California Statute of Limitations to understand how difficult it is for me (or anyone else online) to answer statue of limitations questions for readers. Which statute of limitations applies to you in your situation almost certainly depends on the language in the contract you signed with the card issuer.

      Because a collection agent cannot produce the original contract does not mean the contract is now subject to California's statute of limitations for oral contracts, though I commend your creative thinking here.
      0 Votes

  • 35x35
    Apr, 2011
    terry
    can a judgement rendered against one member of a married couple in ca be levied against a trust bank acct?
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      If the account in question is joint, yes, it is fair game for a levy. If the account is in the other spouse's name only, no, it is not. Consult with a California lawyer who has experience in consumer law for a more precise answer.
      0 Votes

  • 35x35
    Mar, 2011
    Mark
    I live in Ca. and have a judgment from a collection lawyer. Long story short, can they take a vehicle that I own outright to satisfy the lien? I know about the home lien and account seizure's.
    0 Votes

    • 35x35
      Mar, 2011
      Bill
      The answer to your question depends on the value of the vehicle in question, and whether its present market value is more or less than California's vehicle exemption amount. See California Section 704.010-704.210 for a list of exemptions.
      0 Votes

    • 35x35
      Mar, 2011
      Mark
      Once a Abstract of Judgment is received in California, how is it enforced? Can the judgment be placed on multiple properties or just one? Can it be used to try and take a vehicle for example and also be placed on a home? Or, can it be placed on multiple properties?
      0 Votes

    • 35x35
      Mar, 2011
      Bill
      Find a California attorney who has experience in California's remedies laws about the judgment. He or she will review the judgment and the discuss the judgment-debtor's assets with you. Review my original answer above, which discusses the common remedies available to judgment-creditors in California, to get a general idea of what is allowed in California.
      0 Votes

  • 35x35
    Dec, 2010
    Nancy
    For the statute of limitations in California, what date do you use? The date you last used the credit card? The date you stopped paying the credit card? I have a card that was $500 limit and stopped paying it due to unemployment and outrageous fees and interest rate hike and this account charged off and then capitol one re-opened this account on their own and keeps sending me statements and collection calls simultaneously. I'm worried they will try to open a court case. In 2007 is when I stopped making payments.
    0 Votes

    • 35x35
      Dec, 2010
      Generally speaking, the date used is the date the consumer last took an action on the account, such as a payment. The creditors' activities are irrelevant for the purposes of determining the start of a statute of limitations.
      0 Votes

    • 35x35
      Mar, 2011
      Tiffany
      My husband has a judgement against him that was issued in 2004, we live in california and the judgement was for a car that was repo'd. My question is we are trying to buy a house and his judgement is holding us back. There has been no contact from the company since the judgement issued that was 7 years ago. Should we contact the law firm that represented the finance company and try to settle with them? The debt is for $10,142.00 and if so how much should we offer? Or Should we contact them and try to set up a payment plan? Why do you think they haven't done anything in the last 7 years?
      0 Votes

    • 35x35
      Mar, 2011
      Bill
      The California statute on limitations for a judgment is 10 years. The reasons why the judgment-creditor has not tried to collect on its judgment are endless and center around incompetence: It could have lost the judgment, misfiled the paperwork, sold it to another collection agent that cannot find you, and so on. It could also be the judgment-creditor is playing a waiting game and hoping you will come to it under the circumstances you described to use your situation as leverage to extract the largest possible recovery. This is far-fetched, but possible.

      You must be exceedingly careful when negotiating with this judgment-creditor. You put yourself at a severe disadvantage if you reveal your reason for opening negotiations at this time. Instead, say the judgment is bothering you, and you want to settle the debt to clean up your credit score. Strive for a pay for delete. I suggest a lump-sum settlement, and begin negotiations at 25 cents on the dollar.
      0 Votes

  • 35x35
    Dec, 2010
    Hal
    Thanks for the info.Still confused. I\'m in CA. My home is owned & in family trust. I don\'t mind a lien based upon sale. I would have issue if I\'m vulnerable to having my home or vehicles, equipment or other personal property, seized in order to satisfy my 40K debt. Any feedback appreciated. Thanks for your considerations. Back Story is that I can no longer get close to min pymnts and am considering straight up default as bankruptcy is not an option.
    0 Votes

    • 35x35
      Dec, 2010
      I cannot offer an observation because I do not know enough about your situation. As the original answer above discusses, if you are defaulting on a mortgage or deed of trust, then the creditor can foreclose and the sheriff will evict you from the property in question. If you are defaulting on an unsecured debt, such as a credit card, then default with no settlement may result in wage garnishment, account levy, and lien. My only useful thought is to recommend you consult with an attorney in your state who has experience in bankruptcy. You mentioned bankruptcy is not an option, but did not say why. Talk over your situation with a bankruptcy attorney to learn your debt resolution options.
      0 Votes