California Debt Blog

FAQ: What is a debt collector forbidden from doing?

Question: I think my debt collector is harassing me. What is the debt collector legally forbidden from doing to collect the debt?

 

Answer:  The Federal Trade Commission publishes a guide for consumers that details exactly what debt collectors can and cannot do under the Fair Debt Collection Practices Act (FDCPA) when they are attempting to collect the debt. The FDCPA applies to most consumer debts except those incurred in running a business.

 

Collectors may not:

• contact you at inconvenient times or places (such as early in the morning or late at night);
• harass you with threats of harm or obscene language;
• lie to you, such as about the amount you owe;
• tell you you’ll go to jail if you don’t pay;
• tack on extra interest that is not allowed under law;
• contact you at work if you’ve told them not to;debt co
• discuss your debt with anyone other than you, your spouse, or your attorney;

 

If a debt collector has violated the law, you can sue the collector in state or federal court within one year of the alleged violation. You can be compensated for any damages the debt collector’s actions caused, and you can also be awarded court costs, attorney’s fees, and $1,000.

And remember that California's Rosenthal Act applies many of these same rules to the original creditor.

FAQ: Credit Checks by Prospective Employers

Can a Potential Employer Run a Credit Check on Me? In California, yes.

 

A bill went through the California Legislature last year that would have prohibited employers from running credit checks on perspective employees, but it was vetoed by Governor Schwarzenegger.

 

However, a potential employer must have the written authorization of the potential employee before running a credit check. In addition, if the employer decides not to hire the applicant after running the credit check, the employer must give the applicant the name and contact information of the company that prepared the report, as well as a copy of the report. The applicant can then dispute the completeness or accuracy of the report.

 

Lawmakers in 16 states have proposed banning most credit checks on potential employees, claiming the practice traps people in debt because it gives those with past financial problems a tough time in finding work. Hawaii and Washington currently have laws in place that prevent employers from running credit checks when hiring for most positions, unless the information is relevant to the job.

 

Employers who use credit checks as a hiring tool claim they help make better hiring decisions. A 2008 survey by the Association of Certified Fraud Examiners found that the two most common red flags for employees who commit workplace fraud are living beyond their means and having trouble meeting financial obligations.

FAQ: Should I pay a store credit card?

Q: I have a credit card with a store that is going out of business. I have read on the internet that I should stop paying my credit card. Is this true?

A: NO! Do not stop paying your credit card, unless you want your credit score to fall or you want to be sued - or both.

Store credit cards, such as Circuit City or Mervyns, are not owned by the store. Rather, a large bank, say Chase or Citibank, owns the card. Your payments are to that company. You do not pay Circuit City or Mervyns. So, when Circuit City shuts its doors, your credit card balance does not zero out. Rather, the money is still owed to Chase or Citibank.

If you stop paying your card, the bank will either send you to a collection agency, report you to the credit reporting agencies or sue you for the balance. And you still owe it. The store going out of business is not a defense to this case.

So, if you have a card with Circuit City, keep paying it until it is paid off!

FAQ: I am a renter and my landlord has been foreclosed on.

Q: I am a renter and I think my landlord has been foreclosed on. Help!

A:How can I find out if my landlord still owns the condo or it is foreclosed on? Go down to your county recorder. Give them the property address. They will look up all documents filed on the property in the last 90 to 120 days. You will see if the property has been sold.

If the bank really owns the condo, is the security deposit transferred to the bank? No. You need to get this from the landlord. You may have to sue in small claims court for it.

If the landlord does not own the condo, can I demand to get my security deposit and the December's rent while I still occupy the condo? Yes. Again, you may have to sue to get it back.

You should also consider the cash for keys deal. This may provide you with some access to money sooner rather than later.

What can I do to protect myself? Consider recording your lease when you sign a lease. This provides you the maximum protection under California law.

FAQ: Power of Sale Notice Requirements in California

A notice of default is recorded after a default occurs      in the county in which the property is located. This does not necessarily      occur after one or more payments are not met but may occur after a loan is      in substantial default — sometimes six months or more past due. This is      known as the redemption period. The foreclosure process does not move      forward for a minimum of 60 days. A notice of sale containing the name and      address of trustee, certain disclosures, the name of the beneficiary, and other information      must be recorded in the county in which the property is located at least      14 days before any foreclosure sale can take place. This is known as the      publication period.

The borrower must receive a      twenty (20) day notice before any foreclosure sale. Further notice of the      foreclosure must: (a) be mailed to the defaulting borrower (and other      creditors whose liens affect the property) and; (b) be posted at the      property being foreclosed upon and in a public place in the county where      any sale would occur. The defaulting borrower may prevent the foreclosure      sale by paying all arrearages up to five (5) days before the sale.

Foreclosure sales must take place      on any business day between the hours of

9AM

and

5PM

     and must occur at the location referenced on the notice of sale. The trustee will auction the property      to the highest bidder, including the lender. The borrower is permitted to      postpone the sale for one (1) day.

In

California

, the lenders can also go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. If the deed of trust does not contain the power of sale language, the lender may seek judicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in county court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

FAQ: How long does it take to foreclose a property in California?

This process may be delayed for various reasons however; it usually takes a minimum of 120 days to effectuate an uncontested non-judicial foreclosure.

FAQ: What are the legal instruments that establish a California mortgage?

The documents are known as the deed of trust, note, and in a commercial transaction, a security agreement. Alternatively, a mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

FAQ: How are California mortgages foreclosed?

The two methods California uses for foreclosures are known as non-judicial and judicial. A non-judicial foreclosure does not involve court action. In California non-judicial remedies have stringent notice requirements and the mortgage documents are required to contain a power of sale language in order to use this type of foreclosure method. The deed of trust will usually contain a power of sale clause, which upon default allows a trustee to sell the property in order to satisfy the underlying defaulted loan. The trustee acts as a representative of the lender to effectuate the sale.

California has a requirement called the one-action rule. If a foreclosure is completed by non-judicial means, a second action to recover a deficiency judgment is not permitted. The judicial process is much longer, thus is rarely used. Using a judicial foreclosure, a lender may recover a deficiency judgment in certain circumstances. Judicial foreclosures are permitted in California and these usually occur when no power of sale language is included in the loan documents.

FAQ: How are mortgage liens treated in California?

California has a complicated set of rules concerning foreclosures, another set of rules apply for foreclosures. In California, a property title remains in trust until the underlying loan becomes paid in full. The document that secures the property title is most commonly known as the deed of trust or referred to as a mortgage.

FAQ: Can I get a new social security number?

Q: My social security number was stolen. Can I get a new one?

A: Maybe. The Social Security Administration may give you a new one. From their website:

If you have done all you can to fix the problem and someone still is using your number, we may assign you a new number. We can help you complete an application, but we cannot guarantee that a new number will solve your problem.

You cannot get a new Social Security number if:

• You filed for bankruptcy;
• You intend to avoid the law or your legal responsibility; or
• Your Social Security card is lost or stolen, but there is no evidence that someone is using your number.