How to Stop Wage Garnishment in California
If a creditor is garnishing your wages in California, you have options. Learn the steps you can take to stop or reduce garnishment and protect your income.
If you are facing wage garnishment in California then there are several steps you can take to stop the garnishment. In California when a creditor obtains a judgment against you and can determine who your employer is, they may take steps to garnish your wages. If you owe money from a payday loan, credit card, personal loan or medical bill, and you do not pay then they may eventually file a lawsuit in court, obtain a judgment and garnish your wages. In California the law allows creditors to garnish up to 20% of wages. This is a substantial amount if you are living paycheck to paycheck and may affect your ability to provide for your necessities and your family’s needs.
What Are Your Options If a Creditor Has Served Your Employer with a Wage Garnishment Order?
1 Call the Creditor / Negotiate with Creditor
Payment Plan Option
There is nothing lost in trying to talk to the creditor and work out a different arrangement to repay the debt back. If the creditor is open to setting up a payment plan, then you can avoid having your wages garnished. Unfortunately, this is rarely successful. Some creditors who are understanding may be willing to work with you. Many creditors are for the most part not open to discussing payment arrangements once they have a garnishment order that can collect on the money owed. If you are lucky, you may encounter a somewhat open creditor to setting up a payment plan. The creditor in many cases will require that you sign a stipulated settlement agreement as part of the agreed upon payment plan. In these types of agreements, the creditor generally agrees to stay the entry of judgment (pause enforcement of judgment) as long as you continue to follow the terms of the payment plan.
Lump Sum Option
If you have funds available you can offer a lump sum settlement agreement. Whether they will agree to this option will depend on the offer you are making and what information they have available about your finances. Some creditors may be willing to settle for a lump sum if they suspect you may be filing for bankruptcy.
2 File a Claim of Exemption
In California you may be able to stop the wage garnishment through filing an exemption. You may be able to have the wage garnishment stop or reduce the amount being garnished if you can show that the money is needed to support you or your family. If you can show that the money is needed to provide for the basic necessities of life, then you may be able to stop the garnishment. There are several steps you need to take in order to stop the garnishment through filing a claim of exemptions in California.
Step 1: File a Claim of Exemptions Form
The claim of exemptions for California can be found here:
California Claim of Exemption WG-006 →Directions on Completing the Form
Top section (Attorney or Party Without Attorney): Fill in your name, address, telephone. Fill in the information on the court location, plaintiff, defendant and case number and levying officer file number by utilizing a copy of the garnishment order. The order should have this information, which you can use to fill in these sections. Do not fill in the boxes that state “For Levying Officer Use Only” or “For Court Use Only”. In the section “Attorney For” write in “In Pro Per”, if you are representing yourself.
Question 1: Fill in your name.
Question 2: Mark the box for the total earnings needed to support yourself. If you do not need all then mark the box that allows you to specify the amount per pay period that you need.
Question 3: Mark that you want all documents sent to you, if you do not have an attorney.
Question 4: State how much you are willing to have the creditor withhold. If none then mark this box. If you are willing to have a portion withheld, then mark the second box and state the amount per pay period.
Question 5: Mark how often you are paid.
Print your name at the end, and sign and date the document.
Step 2: Fill Out a Financial Statement
You must include a financial statement with your Claim of Exemptions. The financial statement details your income and your expenses. The California Financial Statement form:
California Financial Statement WG-007 →Directions on Completing Financial Statement
Question 1: List all the people that depend on you for support, their age, relationship to you, and their monthly take home income and source.
Question 2: List your monthly gross income, then list the monthly deductions for taxes and any other deductions such as health insurance, life insurance, and retirement plans. Do not list the garnishment as a deduction. Deduct section a from b to come up with your total net monthly income. In Question 2d add any additional income you receive such as child support, disability benefits, retirement income, etc. List your total monthly income by adding c and d together and listing it on e.
Question 3: List the assets your spouse, your dependents and you own. List the total cash you have. In 3b list the type of account and with which bank you have the account. List the amounts you currently have in each account. In 3c list your vehicle equity. If your car is paid off or has equity list the make and model and the equity in the car. If the car is upside down, then the car has no equity and should not be listed as having equity. In 3d list the equity in your home. If the home is upside down because the mortgage is higher than what it is worth, then the house has no equity. In 3e list any other property you own and give a realistic value of equity. For example, if you have used furniture, you should value it based on what it would be worth now and not what you bought it for.
Question 4: List your total monthly expenses for each of the items and list any additional expenses that are necessary for your support in 4m. List your total monthly expenses in 4n. If you are stating that you need all of your income to provide for your basic necessities, then the total expenses should be the same or higher than your monthly income.
Question 5: List all creditors which you are making monthly payments that are necessary for your support such as vehicle payments, furniture, etc. List the name of the creditor, what it is for, the amount of the monthly payment, balance owed and who owes it.
Question 6: Describe any other facts that support your Claim of Exemptions. Provide as much detail as possible that will support your claims and help the judge understand your situation.
Question 7: If you are being garnished by a creditor and it is not for child support or alimony then mark this box.
Question 8: If you are being garnished for child support or alimony then mark this box.
Question 9: If you are living with your spouse then mark “my spouse has signed below” and your spouse will also have to sign the form. If you are living apart then mark the box that states this, and your spouse will not have to sign the form.
Print your name, date, and sign the form.
Step 3: File with the Levying Officer
Attach the financial statement to the Claim of Exemptions and file the documents with the levying officer and not the court. Make sure that you also provide an additional copy of each document to the levying officer. Do not try to file the documents with the courts.
Step 4: Attend a Hearing
If the creditor opposes the claim of exemptions, then the matter will be set for a hearing. Make sure to read the opposition papers and reply if needed. You must attend the hearing with all of your documentation and be prepared to present your case to the judge. The judge will make the determination on whether they will allow the claim of exemptions.
3 File for Bankruptcy to Stop Wage Garnishment
You can stop the wage garnishment from proceeding by filing for bankruptcy in California. Most people may see this as a last resort, but the truth is that it may be the better option for many people. When you file for bankruptcy, there is an automatic stay put in place. The automatic stay prevents the garnishment from continuing. Once the bankruptcy case is filed the sheriff’s office will be informed of your filing and they will issue a release to your employer, that will prevent the garnishment from continuing.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to immediately stop the wage garnishment and, in some cases, you may be able to have some of the funds that were garnished prior to bankruptcy returned to you.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy provides you with the ability to set up a payment plan over 3 to 5 years that is based on your disposable income. You can incorporate other debts that may be outstanding into the payment plan.
4 Fight the Judgment
There are other options you can also seek to stop a wage garnishment such as fighting the entry of a default judgment obtained based on lack of notice. If you have a basis, you may be able to vacate the judgment that was entered against you. In California you can vacate a default judgment if:
- No Actual Notice of Summons — If you show that the service of the summons did not result in actual notice in time to defend the lawsuit.
- Mistake, Inadvertence, Surprise or Excusable Neglect — You can also vacate a judgment if you can show that the entry of default was the result of “mistake, inadvertence, surprise or excusable neglect”.
In order to vacate the judgment, you must file a motion to vacate a default judgment. If the judgment is vacated, then it will stop the garnishment. Keep in mind that this may not be a permanent solution. The creditor may choose to refile the lawsuit and correct what error was made and proceed with obtaining a judgment against you and garnishing your wages.
5 Call a Bankruptcy Attorney to STOP Garnishment
Orange County and Riverside bankruptcy attorney Norma Duenas has represented more than 3,000 individuals and couples in filing for Chapter 7 and Chapter 13 bankruptcy. Her focus is on ensuring that clients understand how bankruptcy works and whether it is the right option for their unique financial circumstances.
Attorney Duenas’ approach is to present those taking advantage of a FREE consultation the best possible options available to resolve their financial problems and to help them rebuild their financial future. Ms. Duenas is a member of the National Association of Consumer Bankruptcy Attorneys and has an Excellent rating among clients on Avvo.com. Her law office is also part of the Better Business Bureau and has an A rating.
As part of meeting with Norma Duenas you will fill out a questionnaire in person or online from home that will help us evaluate your financial situation and determine if bankruptcy can eliminate your debts and stop creditor collection efforts. Our founding attorney, Norma Duenas provides a free phone or office consultation up to one hour to review your facts, answer your questions, and provide you with all possible options.
If you need further assistance or to schedule a free phone or in-person consultation, please call us at (866) 337-7220 or email us if calling us is not practical or it’s after hours.
Facing Wage Garnishment in California?
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Frequently Asked Questions About Wage Garnishment in California
How can I stop wage garnishment in California?
There are four main ways to stop wage garnishment in California: (1) Negotiate with the creditor to set up a payment plan or lump sum settlement, (2) File a Claim of Exemption showing the wages are needed for basic necessities, (3) File for Chapter 7 or Chapter 13 bankruptcy which triggers an automatic stay, or (4) Fight the judgment by filing a motion to vacate if the judgment was entered improperly.
How much of my wages can be garnished in California?
In California, the law allows creditors to garnish up to 20% of wages. This can be a substantial amount if you are living paycheck to paycheck and may affect your ability to provide for your necessities and your family’s needs.
What is a Claim of Exemption for wage garnishment in California?
A Claim of Exemption (California form WG-006) is a legal filing that can stop or reduce wage garnishment if you can show the money is needed to support you or your family and provide for the basic necessities of life. You file it with the levying officer along with a Financial Statement (form WG-007), not with the courts.
Can bankruptcy stop wage garnishment in California?
Yes. When you file for bankruptcy, an automatic stay is put in place that prevents the garnishment from continuing. Chapter 7 bankruptcy can immediately stop the garnishment and in some cases allow you to recover funds garnished before filing. Chapter 13 bankruptcy allows you to set up a payment plan over 3 to 5 years based on your disposable income.
Can I vacate a default judgment to stop wage garnishment?
Yes. In California you can vacate a default judgment if you can show that the service of the summons did not result in actual notice in time to defend the lawsuit, or if the entry of default was the result of mistake, inadvertence, surprise or excusable neglect. If the judgment is vacated it will stop the garnishment, though the creditor may choose to refile the lawsuit.
Where do I file a Claim of Exemption for wage garnishment?
File the Claim of Exemption (form WG-006) and Financial Statement (form WG-007) with the levying officer, not with the courts. Make sure to provide an additional copy of each document to the levying officer. If you need help, call (866) 337-7220 for a free consultation.