Californians in debt may have wondered about wage garnishment, which refers to a practice where a portion of your wages is automatically deducted for the purpose of repaying a debt. Knowing your rights as regards wage garnishment will give you a leg up if the day comes where you have to go to court for a debt judgment.
Statute of Limitations
California law sets limits on how long creditors have to collect a debt from you. After this time period expires, they can no longer file suit against you in court for the debt, though they are legally allowed to pursue other lawful means of collection. Your creditor has an initial period of four years to collect on a debt. However, if your creditor has obtained a judgment, they have up to 10 years to collect on the judgment.
Writ of Garnishment
In California, a mere judgment does not entitle your creditor to collect via garnishment. They must first go before a judge and get a writ of garnishment. This establishes that a judgment was filed and that you have failed to satisfy this judgment. This hearing usually doesn't involve you. Rather, your employer and your creditor meet to figure out precisely how much of your wages will be garnished.
Employee Rights
When your wages are garnished, you don't have to fear losing your job over it. California law prohibits your employer from firing you over wage garnishment.
Limits on Garnishment
California law sets limits on how much of your wages is eligible for garnishment. This is set by one of two standards. The first is 25 percent of your disposable income. In California, disposable income refers to everything that you have left after legally mandated deductions are made. This means that living expenses such as rent and employer deductions like health care aren't included. The other metric used is anything you make that exceeds 30 times the federal minimum wage. The lower number of these two indicators will be used for the purpose of setting a limit on what a creditor can garnish.
Exemptions
California is one of the most generous states in terms of laws exempting what creditors can garnish. The law protects pensions, public assistance benefits and insurance payouts from garnishment except in the case of child support and tax debt.
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