What You Need to Know About the California Statute of Limitations on Debt

• California’s statute of limitations on debt generally gives creditors only four years to pursue legal action.

• It’s crucial to avoid certain actions that can reset that time limit.

• The attorneys at OakTree Law ensure you understand your rights and help you pursue the strongest legal strategy for your situation.

If you’re dealing with old debts, it’s critical to understand California debt collection laws and the statute of limitations. Under the state’s Code of Civil Procedure § 337, creditors typically have only FOUR years to take legal action to collect payment.

If you can prove a debt has passed the four-year deadline, the protections offered by the California statute of limitations on debt mean you cannot be ordered to pay it. But, as with most legal matters, avoiding being taken to court is not as simple as setting a calendar reminder.

You need to have a clear understanding of the applicable laws, what can restart the debt statute, and what to do if you’re threatened with legal action. Here’s what to know about the statute of limitations on collections in California, and how to get help from skilled attorneys to preserve your rights.

When Does the Statute of Limitations Begin on Debt?

For credit card and other consumer debt, the California statute of limitations begins on the date of the last payment or last charge you made on an account.

Each purchase you make or payment you send resets your account activity. In other words, activity creates a new starting point for the statute of limitations on California collections, should you eventually stop paying.

Charge-Offs vs. Account Activity

Many debtors mistakenly think the statute doesn’t kick in until their creditor has charged off the debt (usually around 180 days of delinquency). An experienced debt attorney will carefully scrutinize your account activity to determine when a creditor’s legal action to collect debt is time-barred under California law.

Critical Information

• Charges and payments.
• New or updated written contracts signed by you and your creditor.
• Oral agreements to pay back money.
• Promissory notes.

These and other actions are what can restart the debt statute of limitations in California. If you are struggling with debt, NEVER send payments or sign any agreements until you’ve consulted with an attorney.

Does Anything Pause the California Statute of Limitations on Debt?

Many events can stop or “toll” the clock, thereby extending the time limit creditors have to take legal action against you. These include:

• If you are out of California for a period of time.
• You have entered bankruptcy.
• Both parties signing a voluntary agreement regarding the debt.
• A concept called equitable tolling, in which fraud, interference, or other unforeseen circumstances prevented the timely filing of a lawsuit.

These exceptions are often complex and specific to your own circumstances. Before making any assumptions about what can stop and then restart the debt statute of limitations in California, it’s crucial to consult a qualified attorney.

Does Only California’s Statute of Limitations Apply to Your Debt?

Not always. Hidden in the details of your credit agreement might be a “choice-of-law clause.” That means your debt could be subject to statutes of limitations on collections that differ from California’s.

Out-of-State Creditors

Some of the biggest credit card issuers are located in Delaware (Chase, Discover, Citi, Bank of America), while Capital One is in Virginia. This complicates California debtors’ ability to understand how different statutes of limitation on debt may apply to them, and when the clock stops and starts ticking.

Don’t Be Blindsided by Different Laws

The type of contract you agreed to and the state in which it’s enforced can affect your rights. An OakTree Law attorney can help you understand what laws apply to your circumstances before you’re surprised in court.

What if You Believe the California Statute of Limitations Has Expired on Your Debt?

Never assume your debtor is correct, and don’t take threats of a lawsuit lying down. Seek a professional review of your circumstances. If you are sued after the California statute of limitations for collections has expired, you have to defend yourself.

That’s where an experienced debt attorney comes in. The 5-star team at OakTree Law will carefully review your case, file the correct paperwork, and vigorously assert your rights. Don’t wait until your court date to get help.

Navigate California’s Statute of Limitations on Debt With OakTree Law

Applying the California statute of limitations to your debt-related case can be challenging to manage on your own. You need legal representation to find the best solutions for your situation.

OakTree Law is ready with the expertise you require.

Whether you are struggling with outstanding debt, facing harassment from collectors, or considering bankruptcy to eliminate your credit card debt, contact us for a FREE evaluation of your case. Take the first step toward financial relief today. Call (800) 535-1627.