Statute of Limitations

• When another party, including a finance company, believes you have wronged him, he has the right to sue you in a local court. But California state laws, sections 335 to 337, place statutes of limitations regarding lawsuits. The lender for most finance accounts, such as credit cards, only has four years to try to enforce the contract through a court system. If an individual believes you caused wrongful death or injury, she has only two years to sue you for monetary damages.
  
  

Garnishments and Deductions from Wages

• If you lose a civil lawsuit, or owe delinquent taxes, student loans or child support, the creditor can secure a wage garnishment against you. Your employer also has the right to take some types of deductions, such as taxes and medical insurance premiums, from your paycheck. But your employer cannot deduct the cost of a required medical exam, photograph, uniforms or approved business expenses from your paycheck, according to the California Department of Industrial Relations. If cash or property is missing or you damage company property, your employer cannot take restitution from your paycheck without a court order.
  
  

Rosenthal Fair Debt Collection Practices Act

• In 1977, California adopted the Rosenthal Fair Debt Collection Practices Act. This law regulates the collection activities of both original creditors and debt collectors hired to pursue payment of another party's debt. Debt collectors cannot call outside of the hours of 8 a.m. to 9 p.m. Pacific Standard Time, must provide evidence of the debt upon consumer request and cannot misrepresent their job description. Also, within five days of initially calling a debtor, the collection agent must send a letter explaining the debt claim.
  
  

Asset Exemptions

• If someone has lived in California for at least two years and must file bankruptcy to get out of debt, he can invoke state asset exemption laws to protect some of his property. As of 2011, single California residents could keep up to $75,000 of personal property, while a person who is disabled or over the age of 65 could retain up to $150,000 of personal assets, according to Bankruptcy Action. Bankruptcy trustees also cannot seize and sell Californians' insurance benefits, pension plans or retirement accounts.