Consumer debt is the subject of some complex laws, covering topics such as fair debt collections practices, credit repair organizations, repossessions, overdraft protection, and more. These laws are intended to protect consumers from harassment and unscrupulous collection practices, while still allowing creditors to collect what is owed.
An unpaid debt may lead to a collections lawsuit. Losing these lawsuits can lead to wage garnishment, bank levies, and liens on real property. A debtor can respond to the lawsuit in one of several ways. See our guide on “Responding to a Breach of Contract Lawsuit” for more information.
Ultimately, consumers may find themselves in a position where it is necessary to file for bankruptcy. Bankruptcy is a legal process that permits insolvent people or businesses to wipe out their debts and start fresh. Bankruptcy proceedings are governed by federal law and take place in the U.S. Bankruptcy Court. In Sacramento, this court is located at 501 I Street (www.caeb.uscourts.gov/).