After a party receives a monetary judgment in its favor (i.e., the judgment creditor), it must determine how it can collect. One way to do so, is to garner the wages of the person who owes the monies (i.e., the judgment debtor). California Wage Garnishment Law allows a judgment creditor to require a judgment debtor’s employer to withhold the nonexempt portion of the debtor’s disposable earnings for payment directly to the levying officer. Thereafter, the nonexempt portion of the monies are delivered to the Judgment creditor.
As long as the judgment creditor is aware of the name and address of the judgment debtor’s employer, it can garnish the judgment debtor’s wages, just not all of the wages. By attempting to garner a debtor’s wages, it may prompt the judgment debtor to pay off the judgment or agree to a voluntary payment plan. Judgment debtors often do not want their employers to know they owe monies, and cause their employer to have the extra burden of withholding earnings. California Wage Garnishment Law does not apply to self-employed debtors; however, monies due from clients or customers may be levied via a writ of execution. Moses v. DeVersecy(1984) 157 CalApp3d 1071, 1073.
Before a judgment creditor attempts to garish wages, it must make sure the legal action it is about to initiate is inside the judicial district where the debtor resides, possesses real property, or signed the contract sued upon. See15 U.S.C. §1692i.
Once the creditor has an enforceable judgment, it may begin to attempt to garnish wages. First, the judgment creditor needs to ask the Court to issue a Writ of Execution. This document instructs the Sheriff to enforce your judgment in the county where the assets are located. It is the responsibility of the judgment creditor to provide the Sheriff’s Department with the details of how they are to enforce your judgment via a document titled, “Application for Earnings Withholding Order (Wage Garnishment)”.
The Earnings Withholding Order and other documents must be served on the judgment debtor’s employer by the Sheriff’s Department or a registered process server. See California Code of Civil Procedure (“C.C.P.”) §706.101. Once the employer receives service of the Earning Withholding Order and writ of garnishment there is a 10-day grace period. The employer must then provide the judgment debtor with a copy of the Earnings Withholding Order within 10-days of the date of service of the Earnings Withholding Order. See C.C.P. §706.104(a) The employer must fill out the return documents and mail them to the levying officer within 15-days of the date of service of the withholding order. See C.C.P. §706.104(b)
If the judgment debtor believes his or her wages are exempt, he or she has 10 days after receiving notice from his or her employer about the Earnings Withholding Order to file a Claim of Exemption and Financial Statement with the Sheriff’s Department or levy officer to prevent the garnishment from beginning. The judgment debtor may file a Claim of Exemption at any time, but the wages already garnished will not be returned. The judgment debtor may exempt the portion of his or her earnings if proven to be necessary for the support of family and himself or herself. See C.C.P. §706.051
If the judgment creditor does not oppose the Claim of Exemption a modified earnings withholding should be filed with the levying officer. The judgment creditor must file a notice of opposition to the Claim of Exemption with the levying officer within 10-days after the date of mailing of the Notice of Claim Exemption to preserve its rights. If the Claim of Exemption is opposed then the judgment creditor is entitled to a hearing on the Claim of Exemption. The judgment creditor will have to file a motion for a hearing date and the hearing should be held within 30-days. See C.C.P. §706.105.
The pending hearing is a good opportunity to try and negotiate a deal with the judgment debtor as one cannot predict whether the court will agree with the judgment debtor and exempt all of his or her earnings from garnishment.
As wonderful as garnishing wages may sound in an attempt to collect on a judgment, it is imperative that the judgment creditor be aware seventy-five percent (75%) of a judgment debtor’s earnings are automatically exempt from garnishment, except as to judgments for support (such as child support obligations). Thus, unless the debtor has a very large salary, the judgment creditor needs to be patient as it can take years to satisfy a judgment. Also, if the debtor quits or is fired from his/her job, the garnishing of wages ceases until the judgment debtor obtains employment once again. Once the judgment debtor is employed, the judgment creditor must re-start the garnishment process.