A creditor's debt recovery options depend upon the laws governing collection activity in the debtor's state of residence. While federal debt collection laws outlined in the Fair Debt Collection Practices Act (FDCPA) apply to all creditors, each state reserves the right to further limit what behavior is and is not permissible for debt collectors. State-specific guidelines also determine the rights a creditor enjoys following a lawsuit. In California, creditors possess a variety of debt recovery methods against errant debtors.
Collection Activity
The FDCPA protects consumers from abusive debt collectors by prohibiting such behavior as obscene or vulgar language, threats of physical violence and telephone harassment. It also gives debtors the right to force debt collectors to stop contacting them about an unpaid debt.
The FDCPA, while applicable in all states, only applies to third-party collectors such as collection agencies. California grants consumers greater protection from abusive collection activity by extending the FDCPA's protection to encompass original creditors as well as third-party creditors. Thus, all debt collectors who collect from California residents must follow the FDCPA regardless of whether they work for the original creditor or a third party.
Debt Recovery Methods
If you live in California, creditors have the right to contact you about your debt via telephone calls and letters unless you specify otherwise in writing. Should you do so, the FDCPA notes that the creditor can only contact you again in order to enforce a specific remedy--often a lawsuit.
California, as a community property state, grants creditors special rights when legal action against a debtor becomes necessary. The collector can sue either the debtor or his spouse, provided the debtor incurred the debt during the course of the marriage. This is true even if the spouse is not aware of the debt's existence.
Statute of Limitations
California's statute of limitations for debt collection lawsuits varies depending on the type of debt you owe. Written contracts, such as bank loans, provide creditors with four years in which to file suit against you while oral agreements provide creditors only two years in which to file suit. While the California's statute of limitations does not always prevent debt collection lawsuits from occurring, once it passes it provides you with a solid defense should a creditor file a lawsuit against you or your spouse in the future.
Judgment Recovery
A creditor that sues you and wins receives a court judgment. In California, court judgments give creditors the right to garnish you and your spouse's wages, levy your bank accounts and place liens against property either of you own. While a California judgment only remains valid for 10 years, creditors can renew an unpaid or partially paid judgment for a successive 10 year period provided they wait a minimum of five years to file the renewal request.
0 comments:
Post a Comment