California debt collection laws & statute of limitations

California has quietly built some of the strongest debt collection protections in the country: a state collection law that covers even your original creditor, a garnishment formula tied to the state's high minimum wage, strict documentation rules for debt buyers, and — since 2019 — an outright ban on suing over time-barred debt. Here is what each of those rules means for you, with the statutes cited.

Statute of limitations by debt type in California

California gives collectors 4 years to sue on most consumer debt. Code of Civil Procedure § 337 covers actions on a written contract — which includes credit card agreements — and § 339 sets a shorter 2-year period for oral agreements.

The clock generally starts at default — the first missed payment never brought current. After the period runs, the debt is "time-barred."

Here is where California stands apart. In most states, a collector can still file a lawsuit on a time-barred debt and win by default if you don't show up to raise the defense. Since January 1, 2019, California prohibits that outright: a collector may not bring suit or initiate arbitration on a time-barred consumer debt at all (AB 1526, amending Code Civ. Proc. §§ 337 and 339.5 and Civ. Code § 1788.14). For purchased debt, the Fair Debt Buying Practices Act imposes the same ban on debt buyers (Civ. Code § 1788.56). Collectors pursuing old debt must also include a written disclosure telling you the debt is too old for a lawsuit. A time-barred suit filed against you anyway may itself be a violation an attorney can pursue.

That said, never assume a lawsuit is invalid and ignore it. If you are sued, respond — an attorney can determine whether the debt is time-barred, whether the collector can document it, and whether the suit itself broke the law.

Can a collector garnish wages in California?

Only after suing you and winning a court judgment. No collector can garnish your paycheck based on calls or letters — they must go through court first. Even then, California limits what a judgment creditor can take more tightly than federal law.

• California formula (Code Civ. Proc. § 706.050, as amended by SB 1477): garnishment is capped at the lesser of 20% of your weekly disposable earnings, or 40% of the amount by which your weekly disposable earnings exceed 48 times the state minimum hourly wage. Where a local minimum wage is higher, that higher rate is used — protecting even more.
• Federal baseline (15 U.S.C. § 1673): the lesser of 25% of disposable earnings or the amount above 30 times the federal minimum wage per week.
• The rule that protects more of your paycheck controls — and because California's minimum wage is several times the federal $7.25, the state formula shields far more. Lower earners in California often cannot be garnished at all.
• Hardship reduction: you can ask the court to reduce the garnishment further if you need your earnings to support yourself or your family (§ 706.051).

Bank accounts are a separate target after a judgment, but California automatically protects a baseline amount in your account (a "minimum basic standard of adequate care" floor under Code Civ. Proc. § 704.220, adjusted annually), and federal benefits like Social Security remain protected. Exemptions beyond the automatic ones generally must be claimed — on short deadlines.

The trap: don't restart the clock

Before you pay anything — or sign anything — on an account that has been sitting for years, get the dates checked. An attorney can review whether the debt is time-barred and whether you legally owe it at all, at no upfront cost to you.

Your rights in California

Californians get three layers of protection. First, the federal Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. § 1692 et seq.) applies to third-party collectors and debt buyers. Under it, collectors:

• Cannot call before 8 a.m. or after 9 p.m. your local time;
• Cannot harass, threaten, or abuse you;
• Cannot lie about the amount owed, who they are, or what happens if you don't pay;
• Cannot discuss your debt with your employer, family, or neighbors;
• Must stop calling your workplace when you tell them to;
• Must stop contacting you entirely after a written cease-contact request;
• Must send written validation of the debt and honor your 30-day dispute rights.

Each FDCPA violation can be worth up to $1,000 to you in statutory damages, and the law can require the collector to pay the attorney's fees.

Second, the Rosenthal Fair Debt Collection Practices Act (Civ. Code § 1788 et seq.) extends those duties to original creditors collecting their own debts — the credit card company itself, not just the collection agency it hires. The Rosenthal Act incorporates the FDCPA's standards into state law and adds its own remedies: actual damages, statutory damages up to $1,000 per violation, and attorney's fees (§ 1788.30).

Third, debt buyers face the Fair Debt Buying Practices Act (Civ. Code § 1788.50 et seq.): before suing, a debt buyer must possess documentation proving it owns your account through a complete chain of title, the balance at charge-off, and the underlying contract or account records — and must provide them on request. Debt collectors and debt buyers operating in California must also be licensed under the Debt Collection Licensing Act (Fin. Code § 100000 et seq.), overseen by the Department of Financial Protection and Innovation.

Debt buyers frequently cannot produce what the FDBPA demands. If one is calling — or suing — demanding validation and documentation is often where their case falls apart. Start with our complete guide to your rights for how the federal protections work.

Laws current as of July 2026 — statutes change; an attorney can confirm what applies to your situation. This page is general information, not legal advice.