How to Collect a Debt in California

Collecting debts can be a hassle.

Lending money can result in problems. Not only is it possible that the debtor refuses to pay the debt, but it can be hard to prove there is a debt in the first place. Collecting money from a debtor is a stressful process and can often seem like it isn't worth the time and effort. While it can be annoying and problematic, collecting the debt in California doesn't have to be time-consuming.

Things You'll Need

• Records of debt

Instructions

1. Work out the debt without court involvement. Though it doesn't work for every case, sometimes a debt can be collected just by talking to the debtor and working out a plan. Getting the debtor to pay the debt without court involvement can make the process stress-free.

2. File a claim in a California Small Claims Court. Small Claims Court deals with debts of $7,500 or less. The claim should state the amount owed the reason for the debt and other information about the debt. The court will set up a date for the hearing before a judge.

3. Present all of the documents proving the debt in court. A judge will decide on the amount owed and whether the defendant needs to pay the debt or if the debt does not need to be paid. This can be a stressful process, but with the records of the debt it will usually be in favor of the lender.

4. Contact the debtor. Though some debtors will pay the money after it has been required by a court, others will need a reminder. Call or send a letter asking for the amount and giving the debtor an address to send the money. Calls should be done at reasonable hours, no earlier than 8 a.m. and no later than 9 p.m. unless requested to call at different times by the debtor.

5. Get a collection agency involved. For debtors that refuse to pay, a collection agency might be necessary Collection agencies will charge a percentage of the amount owed, such as 15 percent, which will be paid after the amount has been collected.

6. Keep the court informed of a current address. Debtors can pay the court directly instead of the lender. The court then informs the lender that the amount is paid and gives three years for the lender to collect the money before the money is court property.

Tips & Warnings

• Debtors can set up a payment plan at the court.

References

• California Department of Consumer Affairs: After the Judgment...Collecting or Satisfying the Judgment
• California Courts Self-Help Center: Tips for Collecting Your Judgment
• Office of the Attorney General: Consumers Collection Agencies