Below, we’ll explain California and federal laws regarding debt collection practices as well as ways you can improve your credit score by working with a legitimate credit repair company to correct mistakes and inaccuracies in your credit report.
U.S. Federal Law: FDCPA
The Fair Debt Collection Practices Act (FDCPA) is the primary federal law that regulates debt collectors and how they go about collecting debt. It sets forth several rules that debt collectors must follow in order to legally collect a debt. If a debt collector breaks these laws, you can sue the debt collector.
There are a few key parts that affect debtors:
Debt Collectors May Not Harass or Threaten You
Debt collectors cannot call you outside of the hours of 8:00 AM and 9:00 PM or call over and over. They also may not threaten you with bodily harm or arrest. Similarly, they cannot make false or misleading statements, such as threatening to sue you when they have no intention of doing so.
Debt Collectors May Not Defame You
A debt collector cannot send you a letter with anything on the envelope that suggests you owe a debt, as that could inform other people that you owe money to someone and could be detrimental to your reputation.
In that same vein, if they attempt to call you whether in your home, at work, or anywhere else, and they reach a person that is not you, they may only ask to speak to you. They are not allowed to say they are calling to collect a debt, as that would defame you. The only exceptions are in speaking to your spouse if you live in a community property law state such as California, or to a parent if you are a minor.
California-Specific Debt Collection Laws
Like many states, California largely bases its laws on the FDCPA, as it is quite comprehensive. However, the state has recently passed some California medical debt collection laws, and a law known as the ‘Rosenthal Act’ has a few key differences from FDCPA.
Original Creditors
The FDCPA only applies to debt collection agencies—original creditors are not subject to FDCPA laws. California amends this by making the banks and other creditors adhere to the same laws if they attempt to collect a debt themselves.
Statute of Limitations
California has a four-year statute of limitations on filing a lawsuit to collect a debt. It should be stressed that you still owe the debt, but they cannot file a lawsuit in court against you if four years have passed.
It’s important to note that if you make a payment on the debt, accept responsibility for it and agree to pay, or incur additional debt on the same account, that four-year clock will reset. The collector must also inform you if the statute of limitations has passed, but they don’t have to stop contacting you unless you demand they do so.
Repairing Your Credit
If you’ve received calls to collect a debt that isn’t yours or you believe your credit report contains false information, a qualified credit repair company such as The Phenix Group can assist you. We can help remove these inaccuracies from your credit report and help educate you about the credit reporting process as a whole so you’re better equipped to keep your credit in great shape.