Wage Garnishment (in California)
Under California law, if a creditor obtains a judgment against you, and you earn wages as an employee, then that creditor may be able to garnish a portion of your wages. To do this, the creditor must file a lawsuit, obtain a judgment, and then seek court authority to garnish. The garnishment is often upwards of 25% of your net income.
My Wages Have Been Garnished – Now What?
The Non-Bankruptcy Options
- Consensual Solution. You can contact the creditor and attempt to work out a consensual payment plan. Unfortunately, if a creditor has already proceeded to obtaining a garnishment, there may be little incentive for that creditor to negotiate anything;
- Slow It Down. You can proceed with an exemption process, whereby you may succeed in reducing the amount that is garnished, if you can essentially show that garnishing your wages prevents you from covering the basic necessities for you and your family. Unfortunately, this process is complicated, and at the end of the day, it does nothing to get rid of the debt. You’ve just slow down how fast the creditor gets paid.
The Bankruptcy Option
While many people are hesitant to approach bankruptcy (and this is understandable), bankruptcy can often be an efficient and permanent solution. Bankruptcy may allow you to discharge (i.e not pay) all, or part of the debt. At the same time, bankruptcy halts the garnishment of your pay (under a principal called, the “automatic stay”). Depending on the facts of your situation (which mostly involve how much money you make and whether you own valuable assets), bankruptcy can structure how much of the garnishment debt you must pay, if any. If the garnishment is impairing your family’s financial stability, then there is a very good chance you can discharge some, or all of that underlying debt.
Looking for Advice?
Garnishment issues under Washington state law, see the article here.
While the options discussed above are the most common, there are a few additional angles to explore. If the judgment against you was obtained “by default” (i.e. you never appeared or responded to the lawsuit), then you may be able to overturn that judgment in certain instances. In this manner, you are attacking the wage garnishment by attacking the underlying debt itself. If you succeed in vacating the default judgment, then you will indirectly have stopped the garnishment. However, you still may need to defend against the creditor’s lawsuit. In addition, this path is usually a better option if you actually have a valid defense to the creditor’s claims.