California debt collection laws

How long can someone sue you over a debt in California?

The Code of Civil Procedure sets the period by the kind of obligation, and for consumer debts the two that usually matter are these.

Four years for “an action upon any contract, obligation or liability founded upon an instrument in writing”, under Section 337(a).

Two years for “an action upon a contract, obligation or liability not founded upon an instrument of writing”, under Section 339.

Section 337 also says, in its own words, what a run-out period means. Under 337(d), “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 “shall only be extended pursuant to Section 360”.

Section 360 is narrow. A promise or acknowledgment of the debt counts only if it is “contained in some writing, signed by the party to be charged thereby”. The one kind of payment it treats as restarting the period is “any payment on account of principal or interest due on a promissory note”, and even then “no such payment of itself shall revive a cause of action once barred.”

Which period applies to a particular account, when it started, and whether anything paused it are questions about the facts of that account, and they are for a lawyer rather than this page.

Sources: Code of Civil Procedure Section 337 and Section 339 · quoted 2 September 2026 · Section 360

Do debt collectors have to be licensed in California?

Yes, and the statute is direct. Financial Code Section 100001(a) states: “No person shall engage in the business of debt collection in this state without first obtaining a license pursuant to this division.” The division is the Debt Collection Licensing Act, which Section 100000 says “shall be known, and may be cited, as the Debt Collection Licensing Act”, and the license is issued by the Department of Financial Protection and Innovation.

The same subdivision reaches collectors on both sides of the state line. A person is acting in California “if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state”.

One license covers the business, not each office. The license is “obtained for the licensee’s principal place of business and shall not be transferred or assigned”, and “A separate license is not required for each individual branch office.”

Since when. The requirement is recent, and the gap before it was long. California once licensed collection agencies, but the Legislature deregulated the industry with effect from 1 July 1992, and for the next thirty years the state kept no register and required no state license: a collection agency needed only a local business license, and the state’s own consumer guidance recorded that no agency held information about who was collecting. The Debt Collection Licensing Act ended that. The history note to Section 100000 records it as “Operative January 1, 2022, pursuant to Sec. 100000.5.” Collectors that applied early could keep working while the department considered the application: Section 100000.5(a) provides that the commissioner “shall allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application.” The earliest licenses on the department’s own register are dated January 2023. Two things follow for anyone reading a license. No license on that register is older than January 2023, so the oldest possible license today is under five years old. And a young license number says nothing about how long the business has been collecting: a firm licensed in 2023 may have collected in California for decades, because the state required no license before, and it may also have kept working under the pending-application rule while its license was considered.

Sources: Financial Code Section 100001, Section 100000 and Section 100000.5 · quoted 2 September 2026 · the 1992 deregulation from the state’s consumer guidance on collection agencies (archived copy) · first-license dates from DFPI’s list of regulated entities, read 2 September 2026

Can a city or county require its own license?

No. Financial Code Section 100000.7 is a single sentence: “No county, city, or other political subdivision within this state shall require a debt collector to be licensed or to register as a debt collector.”

That is one way California differs from New York, where the license that matters is New York City’s. In California, the state license is the only one the law provides for.

Source: Financial Code Section 100000.7 · quoted 2 September 2026

Who does not need the license?

Section 100001(b)(1) provides that the Act “shall not apply to a depository institution”, and goes on to list other businesses that hold a different license already: a person licensed as a finance lender or as a residential mortgage lender under the Financial Code, a real estate licensee under the Business and Professions Code, a business subject to the Karnette Rental-Purchase Act, and a trustee carrying out a nonjudicial foreclosure.

Section 100001(c) keeps the Act away from commercial collection as well: it “shall not apply” to “the collection of covered commercial debt or covered commercial credit”, as the Civil Code defines those terms. The same subdivision also keeps it away from debt collection already regulated under Division 12.5 of the Financial Code.

This matters when you look a company up. A bank collecting its own accounts, a licensed lender, or a commercial collector can be operating lawfully in California and lawfully hold no debt collector license.

Source: Financial Code Section 100001 · quoted 2 September 2026

Does a collector have to show its license number?

Yes, in two ways, and both are in Civil Code Section 1788.11. On request: “A debt collector shall provide its California debt collector license number, if applicable, upon the consumer’s request.” And on paper, where the section lists as a prohibited practice “Sending written or digital communication to the person that does not display the California license number of the collector, if applicable, in at least 12-point type.”

So a collection letter or email from a licensed California collector carries the number on its face, in type large enough to read. That gives you a second place to find it, on the collector’s own correspondence, independent of any register.

Source: Civil Code Section 1788.11 · quoted 2 September 2026

What are collectors not allowed to do?

California’s own rules are in the Rosenthal Fair Debt Collection Practices Act, which Civil Code Section 1788 says “may be cited as the Rosenthal Fair Debt Collection Practices Act”. Section 1788.11 opens: “No debt collector shall collect or attempt to collect a covered debt by means of the following practices”, and the list includes “Using obscene or profane language”, “Causing a telephone to ring repeatedly or continuously to annoy the person called”, and “Communicating, by telephone or in person, with the debtor with such frequency as to be unreasonable, and to constitute harassment of the debtor under the circumstances”.

The state law also pulls in the federal one. Section 1788.17 provides that “every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of, Title 15 of the United States Code”, which is the federal Fair Debt Collection Practices Act. The section adds that those federal references are to the codes “as they read January 1, 2001”.

Sources: Civil Code Section 1788, Section 1788.11 and Section 1788.17 · quoted 2 September 2026

How do you check a California collector?

The first place is the Department of Financial Protection and Innovation’s own Regulated Entities List, filtered to Debt Collectors. It shows every license currently in force, with the license number, the legal and trading names, the original license date and the address, and each licensee has its own record page. It carries only licenses in force, so a license that has ended leaves the list; and a bank, a licensed lender or a commercial collector can be lawfully absent, under the exemptions above. Our step-by-step guide covers the traps. The department’s debt collectors page also points the public to NMLS Consumer Access, the national licensing system’s lookup, which is built for a person checking one licensee at a time and sets terms on how it may be used.

The second place is the collector’s own correspondence. Under Section 1788.11, a licensed collector’s letters and emails display its California license number in at least 12-point type, and it provides the number on request.

This directory’s California page lists agencies as they pass verification against the department’s list. The states page says which states are covered and what verified means in each.