Garnishment in California is a procedure creditors can use to collect from debtors who do not voluntarily pay. For example, wage garnishment is when a creditor has the right to have part of the debtor’s wages or salary sent to the creditor, to satisfy the debt. Other money of debtor’s in the possession of third parties, such as money in a bank account or pension benefits, could also be garnished (unless it’s specifically made exempt; see below), but wage garnishment is one of the most common kinds of garnishment.
Technically, garnishment is a mechanism for enforcing a judgment, or court decision awarding money. Therefore, a creditor has to first sue the debtor and win in order to establish its right to the money. (Exception: tax authorities, like the IRS, do not need to go to court first.)
Social Security is always exempt from most garnishment, though under federal law, it can be garnished for child support, alimony, federal taxes, and a few other debts owed the federal government.
States have the right to make additional sources of income exempt in whole or in part. Most states carve out at least some exemptions, such as for police or firefighter pensions. California, which is generally one of the most protective states of the rights of individuals, as well as one of the most compassionate to those experiencing hard times, has gone further than the majority of states in protecting different non-wage and non-salary sources of income from garnishment.
(The below is summary of California’s garnishment exemptions. Overall, the state has one of the more complex schemes of exemptions, and any California debtor who may face garnishment or other collections efforts is well advised to seek legal assistance to make sure he or she is taking advantage of all the protections available to him or her.)
Therefore, in California, it is difficult to garnish many sources of income other than traditional wage or salary income.
Like many states, California follows federal law in terms of the maximum amount garnished. Under federal law, the lesser of the following may be garnished:
However, note that the “25% rule” above is for most debts. There are certain key debts, like taxes or child support, for which larger amounts can be garnished.
Remember, first there must be a valid judgment, which means that the creditor must have sued within the time period for initiating a lawsuit, called a “statute of limitation.” While there are many different statutes of limitation, depending on the cause of action, for most common consumer debts, such as those resulting from—
—the limitations period is four years.
Once the creditor has a judgment in hand, the creditor has up to 10 years to act. Anytime during the 10 years following its judgment, the creditor may look to garnish the debtor’s wages. This means that a patient creditor can wait until a then-down-on-his-or-her-luck debtor starts doing better before garnishing income.
Garnishment begins when the creditor, armed with the judgment in its favor, applies in writing to court for garnishment. In its application, the creditor states that it is owed money, pursuant to a judgment; that garnishment is believed necessary to secure payment; and that the debtor’s employer (the “garnishee”) has money available and owed to the debtor (the debtor’s salary or wages).
Since the debtor has already had its chance to fight the debt, debtor is only peripherally involved in garnishment. The main actors are the creditor and the garnishee. The garnishee has only very limited grounds for challenging a garnishment, limited typically to the facts of the situation—e.g. that it pays the debtor less than creditor believes, or it cannot identify the debtor from the written description. It cannot challenge the basic right of the creditor to garnishment.
Notwithstanding that creditor will already have a judgment in its favor before seeking garnishment, it may be worthwhile for debtor to seek legal help and look at Stopping Wage Garnishment in California, such as by—