• The California statute of limitations on debt is four years.California flag image by palmer530 from Fotolia.com
  
  Residents of California who have had difficulties with debt should be aware of their state's statute of limitations, debt collection and credit reporting laws. Statute of limitation laws restrict the time period during which a creditor can file a debt collection lawsuit and the collection practices law prohibits collection agencies from making empty threats to collect an out-of-statute debt. In addition, California's credit reporting law sets a time limit on how long negative information about a debt can remain on a credit report.
  
  

Statute of Limitations on Debt

• California sets a statute of limitations on the length of time a creditor has to file a lawsuit to collect a debt. This time frame varies depending on the type of debt: If a debt was established via a written contract, the statute of limitations is four years, if there is nothing in writing, the creditor has four years to file suit. If a creditor wins its lawsuit, it has 10 years to collect the judgment, though the statute of limitations on judgment collection can be renewed upon request.
  
  

Collection Practices

• Residents of California are protected by a federal and California-specific Fair Debt Collection Practices Act (FDCPA). In both cases, the FDCPA prohibits collection agencies from threatening certain actions it does not intend to take or cannot legally take. If a debt is past its statute of limitations, threats from a collection agency to file a lawsuit may be considered a violation of the California and federal FDCPA.
  
  

Credit Reporting

• Both the federal Fair Credit Reporting Act (FCRA) and California's Consumer Credit Reporting Agencies Act restrict the length of time negative information can appear in credit reports. Both laws require negative information be removed after seven years for most debts and judgments. A bankruptcy can appear on a credit report for up to 10 years.