California Governor Signs Law Concerning Time-Barred Debt

California Assembly Bill 1526 creates new requirements for those collecting time-barred debts in that state.

9/11/2018 8:00 AM

NewsStateCompliance
California Governor Signs Law Concerning Time-Barred Debt

California Gov. Jerry Brown signed legislation this month with new requirements for debt collectors collecting in the state.

Assembly Bill 1526, signed into law Sept. 5, 2018, includes amendments that will go into effect Jan. 1, 2019.

The amendments require debt collectors to provide a “first written communication” once the debt becomes time-barred. This “first written communication must include a mandated disclaimer stating the debt is time-barred.

Just like several other states, California is requiring debt collectors to provide consumers with a notice that they cannot be sued for a debt that is past the date of obsolescence. New law provides two possible options to use depending on whether the seven year period for credit reporting debts  has expired. The notices are as follows.

For debts that may still be credit reported under the FCRA:

 “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”  

For debts that cannot be reported under the FCRA:

“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.”

Currently, there is no information available as to whether or not debt collectors who do not furnish data can modify these notices.

The amendments also add a new section that states:

“When the period in which an action must be commenced under this section has run, a person shall not bring suit or initiate an arbitration or other legal proceeding to collect the debt. The period in which an action may be commenced under this section shall only be extended pursuant to Section 360.”

Members collecting in California will want to review their policies and procedures for handling time-barred debt and sending out correspondences in preparation for the Jan. 1, 2019, effective date.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

California Governor Signs Law Concerning Time-Barred Debt

California Gov. Jerry Brown signed legislation this month with new requirements for debt collectors collecting in the state.

Assembly Bill 1526, signed into law Sept. 5, 2018, includes amendments that will go into effect Jan. 1, 2019.

The amendments require debt collectors to provide a “first written communication” once the debt becomes time-barred. This “first written communication must include a mandated disclaimer stating the debt is time-barred.

Just like several other states, California is requiring debt collectors to provide consumers with a notice that they cannot be sued for a debt that is past the date of obsolescence. New law provides two possible options to use depending on whether the seven year period for credit reporting debts  has expired. The notices are as follows.

For debts that may still be credit reported under the FCRA:

 “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”  

For debts that cannot be reported under the FCRA:

“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.”

Currently, there is no information available as to whether or not debt collectors who do not furnish data can modify these notices.

The amendments also add a new section that states:

“When the period in which an action must be commenced under this section has run, a person shall not bring suit or initiate an arbitration or other legal proceeding to collect the debt. The period in which an action may be commenced under this section shall only be extended pursuant to Section 360.”

Members collecting in California will want to review their policies and procedures for handling time-barred debt and sending out correspondences in preparation for the Jan. 1, 2019, effective date.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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