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If you owe a debt, it’s important to respond as soon as possible—even if the collector has contacted your employer or reported negative information about you. The faster this situation can be resolved without further damage being done, the better. A debt can negatively affect a person’s credit score or even cause being sued by one of the parties.
California Commercial Debt Litigation
The creditor may be able to get a default judgment against you if you don’t respond. This means the court will enter their favor and grant them ownership of whatever property or assets are at stake, such as wages and bank accounts, which could then garnish those items from your paycheck every month. You should definitely consult a debt collection attorney before ignoring any lawsuits because it could set up serious problems for future interactions with creditors in this country (and others).

Commercial Debt Collection and Californian Law

Commercial debt collection can be a complicated process with many laws that apply to California and Federal law.  Business owners in the California area need an attorney who knows how these obligations are managed, especially when it comes down to making legal demands on behalf of their clients for payments or gone out-of-business without settling their outstanding debts.

Common debt collection issues in California

Disputing a Debt:

If a debt collector contacts you about an old unpaid bill, dispute it in writing and ensure that any debts are accurate. Don’t panic! The best course of action is to dispute the validity of this claim with them. If there are multiple debts being collections at once or if it’s been a while since any payments were made on those accounts, then take time out now so as not to be overwhelmed by their inquiries in person later or over email. Write back explaining why these accounts do not belong solely attributed/belonged entirely theirs and request documentation proving ownership.

Before contacting your creditors, be sure that the amount owed is correct and send any objections or complaints in writing. Your creditor will then have 30 days from receipt of this validation notice (a sort of pre-listing), during which time they may neither contact nor collect on their loan unless you first agree otherwise via email between both parties.

In case the collector contacts you about an old debt and says that they need payment within five days or their agency will take legal action against them, be aware this may actually harm your chances of getting out unscathed. Debt collectors have been known to employ scam tactics like sending validation notices without first notifying customers as required by law. If they seeking payment, make sure to dispute the validity of their claim in writing within 30 days. The debt collector will are you legally prohibited from persisting in contacting you until proof of the payment is made within 30 days.

Dispute a debt in writing if:

  • You do not owe the amount owed; or
  • You have already paid off this debt;
  • You need further information about the debt; or
  • You want to restrict contact with the debt collector.

And don’t forget to make sure you send the dispute letter by certified mail with a return receipt and keep one copy of both for your records.


Harassing or abusive behavior is not allowed when collecting debts. Debt collectors cannot swear at you, threaten your safety and property if they do not have the legal right to do so, and make repeated calls for annoyance purposes only- this includes early morning hours until late evening on weekdays (8am – 9pm) as well weekends since most people find those times inconvenient due their work schedule.

You may restrict communication with a debt collector only by mail or through your debt collection attorney. Make sure to contact the debt collector by a formal letter or email, and keep copies of the request. You also have rights.

Debt Collector Contacting Your Employer

There are only a few cases a debt collector may contact your employer:

  • To verify your employment;
  • To get the address and phone number of where you work so they can mail or deliver a letter to that employer if it is not already served on them in person.
  • To collect any wages owed (garnishment). However, only when an order from the court has been filled and approved;
  • If the deb is related to medical spending, the collector may contact your employer to confirm if this individual does not have medical insurance or;
  • It is agreed by you or your attorney that they may contact your employer


Debt collectors can charge interest and fees to your debt if they’re authorized by agreement or otherwise permitted under law. If you ask for an explanation in writing, the collector must provide one-sided details about how much has been charged you per month as well as why this is being done – without any response from them will also be considered a valid request.

Credit Reporting

Debt collectors may report your debts to credit reporting companies, which put together financial reports that creditors use when deciding whether or not they will give you loans. However, debt collectors cannot false information about the debt itself; if someone disputes an invoice in writing with them, then it must be confirmed by both parties before any mention of the dispute goes onto their respective records with either agency (CRO/FICO).


Your debt may be time-barred, which means that you can’t be sued for it. You’re protected by the four-year limit in California. But even though debt collectors may still try and call or send collection notices, even though there is no longer time left for them to sue you.

There are certain circumstances in which the clock starts running or restarts after periods of non-payment (such as paying part-way), so if yours seems likely given these rules, consider consulting a California debt collector attorney before things go southpaws.

Wages, Bank Account, or Benefits

The garnishment of your paycheck is only allowed if you’re liable for the debt.  They can only do so if they’ve already sued you and a court has entered an order for the amount owed, which is usually seen through garnishment of wages or bank accounts—depending on what type it will resemble more closely (garnishee Vs. receptacle).

The creditor may be trying to collect a debt by suing you. They will probably send out a summons notifying the court of their intentions, and if ignored, could result in a default judgment against them (due because they didn’t respond) as well as garnishing wages or bank account for payment until all debts are settled – which could take years. You should consult with a debt collection attorney before responding.

Contact our California Commercial Debt Litigation Lawyers For A Free Consultation

At The Sands Law Group, APLC, our experienced California commercial debt litigation attorneys will evaluate your case, determine whether the debt collection attempts are valid and lawful, and negotiate for reducing or eliminating debts owed. There is no shame in finding yourself in financial distress, and you don’t need to suffer in silence for another day. Contact us office today for a confidential consultation about your case.

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