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Can You be Sued for Credit Card Debt in California?

Card Debt in California

If you miss a credit card payment, you will quickly hear from your credit card company and they will try to work with you to bring your account current. If you miss multiple payments and you do not respond to the emails, letters, and phone calls from the credit card company, your account will eventually be sent to a collection agency.

What Will the Collection Agency Do? 

The collection agency will make efforts to get you to bring your account current. They may offer a payment plan, or if the problem has persisted for a long time, the collection agency might make a deal to settle your debt at a lower amount. If you do not respond to the collection agency, your credit card company might choose to refer your account to a collection attorney with instructions to file a lawsuit against you.

The First Notice

After a debt collector contacts you for the first time, they have five days to send you a debt validation notice. This notice should list:

  • Your debt amount.
  • The creditor’s name.
  • Methods for disputing the debt.

You have 30 days to dispute the debt. You should respond to the collection agency and state your dispute reasons. You may feel that the debt is not valid because you believe you do not owe the money or you may have proof that you already paid the debt amount to the creditor. You can also ask the collection agency to produce evidence of the transaction that led to the debt, and you can simply ask the collection agency for further information about the debt. 

After 30 Days Have Passed

If you do not respond to the first collection agency letter within 30 days, the collection agency can commence its collection processes. They can call you, but not before 8:00 a.m or after 9:00 p.m. If you want the collection agency to cease making calls to you or anyone else about your debt, you should do that in writing. If you want the collection agency to stop contacting you, they must comply, except to inform you that they may file a lawsuit against you or take some other action.

Statute of Limitations

Generally, California law provides a four-year limit for filing credit card debt lawsuits. While you cannot be legally sued after four years have elapsed, your late payments can still be reported to the credit bureaus. Also, if you are past the four-year time-barred debt date, be careful not to “restart the clock” by making even a small payment or agreeing to make future payments, for example. A good California debt collection lawyer can help with this issue.

Zombie Debt

Collections agencies, both large and small, sometimes buy old debt for pennies on the dollar. Even though it may be too late to report that old debt to credit bureaus or sue to collect the old debt, collection agencies can still send you a demand letter. This old debt is commonly referred to as zombie debt because it has “risen from the grave.” Sometimes the collection agency’s letters are crafted to entice you to take immediate action. By responding to a letter regarding debt over four years old, you can cause the four-year statute of limitations to restart.

Legal Help is Paramount

You can be sued for credit card debt in California, but credit card companies and collection agencies must follow the rules. If you believe that you are being unfairly treated by a California credit card company or collection agency, finding a good consumer debt lawyer is important, and The Law Offices of Andrew Ritholz are a good place to start. They can help you learn how to settle credit card debt before going to court.

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