Workers making close to the California minimum wage got additional protection from wage garnishments under a change in the law effective in 2013.
The prior formula limiting a judgment creditor to 25% of a debtor’s after tax wages remains. But the amended law caps a wage garnishment at the lesser of the two calculations.
A judgment creditor isn’t absolutely entitled to the amount figured under these formulas, however.
If the judgment being collected is for a debt other than support, a judgment debtor can seek a reduction in the amount of the garnishment from each paycheck to the extent necessary for his support. CCP 706.051.
The only run of the mill creditor who can garnish your wages is a creditor who has already sued you and won a judgment. That judgment entitles the creditor to levy bank accounts and garnish wages for 10 years or until the judgment is paid in full. More about judgments.
The judgment accrues interest at 10% simple interest per year.
Two questions arise:
1. Can you meet your current living expenses on the money left after a garnishment?
2. Is this judgment just one part of a bigger debt problem?
The dangers of doing nothing are greater than just the other bills that don’t get paid while your wages are garnished.
Too often, the reduction in available cash puts your car or housing payments in jeopardy. And, it probably pays a debt that is dischargeable in bankruptcy, as most unsecured debts are, while non dischargeable debts like taxes, student loans or child support go unpaid.
Here are some ideas on who to pay with the money remaining.
Your wage garnishment action items
See an experienced bankruptcy lawyer. You want to know two things.
- Can you petition the state court for a smaller garnishment? and,
- Does bankruptcy make sense in light of the bigger picture of your income and expenses?
A bankruptcy will stop a wage garnishment. And, you may be able to recover the money taken from your check from the creditor as a preference.
If bankruptcy is an appropriate response, there is no point in paying the judgment creditor for another pay period. Pick up the phone and get some advice.