(a) No claim shall be filed or maintained in small claims court by the assignee of the claim.
§ 116.420.Filing of claim by assignee prohibited
Title 1. Organization and Jurisdiction · Chapter 5.5. Small Claims Court · Article 4. Parties · Last amended 1994 · Last verified July 28, 2026
In one sentenceSection 116.420 bars an assignee of a claim from filing or maintaining a small claims action on it, with exceptions for a bankruptcy trustee, certain holders of retail installment or lien contracts who bought them for investment rather than collection, and a self-insured local government pursuing workers’ compensation subrogation.
Full Text of § 116.420
(b) This section does not prevent the filing or defense of an action in the small claims court by (1) a trustee in bankruptcy in the exercise of the trustee’s duties as trustee, or (2) by the holder of a security agreement, retail installment contract, or lien contract subject to the Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of the Civil Code) or the Automobile Sales Finance Act (Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code), purchased by the holder for the holder’s portfolio of investments, provided that the holder is not an assignee for the purpose of collection.
(c) This section does not prevent the filing in small claims court by a local government which is self-insured for purposes of workers’ compensation and is seeking subrogation pursuant to Section 3852 of the Labor Code.
Plain-English Summary
Section 116.420(a) closes off a route debt buyers might otherwise use: a claim that has been assigned to someone else cannot be filed or maintained in small claims court by that assignee. The rule exists to keep small claims court for the parties involved in the underlying dispute, not for entities that bought the right to collect on it.
Subdivision (b) carves out three exceptions. A bankruptcy trustee acting in that role can still file or defend a small claims action. A holder of a security agreement, retail installment contract, or lien contract under the Unruh Act or the Automobile Sales Finance Act can proceed if it purchased the contract for its own investment portfolio, provided it is not an assignee acting purely for collection purposes. Subdivision (c) adds a third exception for a self-insured local government seeking workers’ compensation subrogation under Labor Code § 3852.
Frequently Asked Questions
Can a debt collector who bought my debt sue me in small claims court in California?
Generally no. Section 116.420(a) bars an assignee of a claim from filing or maintaining a small claims action. Subdivision (b) allows certain investment-portfolio contract holders to proceed, but not an assignee acting purely to collect.
Are there any exceptions that let an assignee use small claims court?
Yes. Section 116.420(b) exempts a bankruptcy trustee and certain Unruh Act or Automobile Sales Finance Act contract holders who bought the contract for their own investment portfolio, and subdivision (c) exempts a self-insured local government seeking workers’ compensation subrogation.
Amendment History
Added Stats 1990 ch 1305 § 3 (SB 2627). Amended Stats 1994 ch 231 § 1 (SB 1771).
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
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