Collecting upon a judgment is not for the faint of heart. Unless there is insurance or a solvent debtor, getting the judgment is only half the battle. The real theater comes after the client has expended considerable sums getting to the judgment only to learn that the debtor typically doesn't just cut a check to the creditor. Instead, many debtors see the writing on the wall and engage in what we in the business call "asset protection." Nothing is more frustrating than finding out that between the time the judge signed the judgment and the abstract of judgment was recorded, the debtor has transferred his residence to a newly set up revocable trust. For many debtors, their home is often the sole source of recovery for a judgment creditor.
Creditors: Did you know that you can add an individual as the alter ego of a corporate judgment debtor post-judgment?
The FDBCA prohibits a debt buyer from filing suit or initiating arbitration or other legal proceedings to collect a consumer debt if the applicable statute of limitations on the debt buyer's claim has expired. See, California Civil Code § 1788.56. When a debt buyer does file suit, the Act includes nine specific requirements that must be included in the allegations of the complaint, as follows:
Under the FDBPA, if the debtor makes a written request to the debt buyer "for information regarding the debt or proof of the debt" then the debt buyer must provide the debtor, within 15 calendar days and without charge, all of the information or documents required by sections 1788.52(a) and (b) of the Act. See, California Civil Code § 1788.52(c). If the debt buyer cannot provide the documents or information within 15 calendar days, then it must cease further collection efforts until it does provide the documents and information.
On January 1, 2014, the California Fair Debt Buying Practices Act ("FDBPA") went into effect. The Act, which is intended to provide more protections to consumers whose debts have been sold to a debt buyer, only applies to these debt buyers. It does not apply to creditors, collection agencies, or collection attorneys.