CaliforniaState Collection Laws

STATE INTEREST RATES AND USURY LIMITS:

• Legal Rate: 7% without written contract

• Contract Rate: 7% oral or 10% written

• Judgment Rate: 10%

• Corporate Rate: 7% oral

 

HOSPITAL FAIR PRICING:

• Every hospital must offer reduced rates to uninsured or underinsured patients that meet the “Federal Poverty Level” guidelines. Hospitals must also have a written policy that states the qualifications for free care and discounted payments. Hospitals must have a written policy stating to whom and when patient debt is advanced to collections. This policy must also state the standards and policies for the collection. Hospitals must provide a written summary at time of billing. If a patient attempting to qualify for charity care or discount care is trying to settle a debt in good faith, then the hospital cannot send the bill to collections.

*This section does not include all information regarding Hospital Fair Pricing. For more information please reference Cal. Health & Safety Code § 127400 – 127446

 

CONTACTING AT PLACE OF EMPLOYMENT:

• Debt collectors cannot contact the place of employment of the debtor unless communication is necessary to the collection of the debt. Communication is only deemed “necessary” if the purpose is to locate the debtor, verify employment or to discover whether or not the debtor has medical insurance. Any other communication must be done in writing and the debtor must be given 15 days to respond before proceeding with attempting to contact the debtor at place of employment, except for when simply verifying a debtor’s place of employment (this may be done orally without prior written consent). Civ. Code 1788.12(a)

 

DISCUSSING DEBT WITH SPOUSE:

• Communication regarding a debt to any member of the debtor’s family is not allowed unless it is the debtor’s spouse or the parents or guardians of the debtor if they are a minor. n. Cal. Civ. Code §1788.12(b)

 

LEGAL AGE:

• Age of Majority: 18

• Emancipation: Upon marriage, active duty with the Armed Forces or upon receiving a declaration of emancipation pursuant to Cal. Fam. Code. § 7002. A minor must be at least 14 to be emancipated. Cal. Fam. Code. § 7120

• Contracts: A minor may make a contract as an adult, but does not have the power to renounce a contract or validate marriage provisions. Cal. Fam. § 6600, Cal. Fam. Code §§ 6700, 6701

 

DEBT RESPONSIBILITY: DOCTRINE OF NECESSARIES

• Both parents are responsible for the support of their child. Cal. Fam. Code §§ 4050-4076.

• The separate property of a married person is not liable for the other spouse’s debts provided that the debt occurred before or during marriage. However, a married person is liable for their spouse’s debts provided that they are “necessaries of life” of the person’s spouse while the spouses are living together. Cal. Fam. Code § 914

 

STATUTE OF LIMITATIONS FOR CIVIL ACTIONS:

• Contracts: Oral contracts, 2 years; Written contracts, 4 years

• Open Accounts: 4 years

•Judgments: 10 years

 

This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice please contact an attorney. 

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