In California, private creditors cannot garnish a debtor's unemployment benefits pursuant to the California Code of Civil Procedure. However, the California Employment Development Department is authorized to invoke collection efforts through garnishment to collect overpayments or unemployment benefits obtained by fraud.
California Code of Civil Procedure
According to the California Code of Civil Procedure, unemployment benefits and contributions are exempt from judgment collections, and judgment debtors are protected from having their unemployment benefits garnished by creditors. However, this statute does not apply to collection efforts used by the state to collect overpaid unemployment benefits from claimants or benefits paid based on fraudulent claims.
Notice of OverPayments
The California Employment Development Department sends claimants a "Notice of Overpayment" if it determines the state paid unemployment benefits erroneously or overpaid benefits. Under California law, the department can assess 30 percent in unemployment overpayment penalties on the amount overpaid. Moreover, the department can disqualify claimants from receiving future benefits for up to 23 weeks. The department is required to seek repayment of fraudulently paid overpayments and penalties assessed on the basis of fraudulent statements. The department has the discretion to waive collections and repayment for overpaid benefits due to mistakes or "non-fraud" cases.
Collection Methods
The California Employment Development Department will seek repayment of fraudulently paid benefits. Claimants must repay them immediately or the department will seek an offset from future benefits or other types of state benefits. Pursuant to the federal Benefit Payment Control program, all states are required to follow the overpayment procedures for overpaid state-federal benefits. The department can offset its overpaid benefits by intercepting lottery winnings, disability benefits and state tax refunds. Furthermore, the department can collect overpayments by garnishing a claimant's bank account and can file liens against his property.
Considerations
Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.
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