California Business Debt Relief Laws: What You Need to Know
Comprehensive Guide to California Business Debt Relief Laws
Complete guide to California's business debt relief regulations, protections, and legal requirements. Understand your rights under California law.
California's Unique Debt Relief Landscape#
California has some of the strongest consumer and business protections in the nation when it comes to debt relief. Understanding these laws can help you avoid scams and maximize your legal protections.
The California Debt Collection Practices Act (CDCPA) and other state laws provide protections that go beyond federal regulations.
Key California Protections#
California law provides several important protections for businesses dealing with debt.
- Debt relief companies must be licensed by the California Department of Financial Protection
- Upfront fees are strictly limited and regulated
- Confession of judgment clauses are unenforceable in California
- Strict limits on wage garnishment (25% of disposable income)
- Extended statute of limitations (4 years for written contracts)
- Strong anti-harassment provisions for debt collectors
- Required disclosures and transparency in debt relief contracts
MCA Regulations in California#
California has been at the forefront of regulating predatory MCA lending. Recent legislation has provided new protections for California businesses.
The California Financing Law now requires MCA companies to provide clear disclosure of terms, limits on confession of judgment clauses, and restrictions on stacking multiple MCAs. These protections give California businesses more leverage in settlement negotiations.
Choosing a California Debt Relief Company#
When selecting a debt relief company in California, verify they're licensed with the DFP, check their BBB rating and complaint history, ensure they don't charge illegal upfront fees, confirm they understand California-specific laws, and get everything in writing before signing.