Collections Services and Wage Garnishment - Collection Department
Castellan Law Group APC
Collections services and wage garnishment are important legal concepts that affect many
individuals and businesses in California. Collections services are companies that specialize in collecting unpaid debts, while wage garnishment is a legal process by which a creditor can seize a portion of a debtor’s wages to pay off a debt. Understanding these concepts is crucial for individuals and businesses who owe debts or who are owed debts.
In California, collections services are regulated by the California Department of Financial
Protection and Innovation (DFPI). Collections services must be licensed by the DFPI and are subject to strict regulations regarding their business practices. These regulations are designed to protect consumers from abusive and unfair debt collections practices.
Wage Garnishment and Limits in California
Wage garnishment is a legal process by which a creditor can seize a portion of a debtor’s
wages to pay off a debt. In California, wage garnishment is regulated by state law and is subject to strict rules and limitations. Generally, a creditor can only garnish up to 25% of a debtor’s “disposable earnings” or the amount by which the debtor’s “disposable earnings” exceed 40 times the state minimum wage, whichever is less. “Disposable earnings” are the amount of money paid to the employee after the employer takes out mandatory deductions such as taxes and Social Security. In general, the most that can be garnished from your wages under California law is the lesser
• 25% of the debtor’s disposable earnings for that week, or
• 50% of the amount by which the debtor’s disposable earnings for that week exceed 40 times California’s hourly minimum wage in effect at the time the earnings are payable. If a
judgment debtor works in a location where the local minimum hourly wage is greater than
the state minimum hourly wage, the local minimum hourly wage in effect at the time the
earnings are payable is used for the calculation (Cal. Civ. Proc. Code § 706.050).
However, a bigger exemption is available if the debtor can show necessity. Under California
law, “the portion of the judgment debtor’s earnings which the judgment debtor proves is necessary for the support of the judgment debtor or the judgment debtor’s family supported in whole or in part by the judgment debtor is exempt from levy under this chapter” (Cal. Civ. Proc. Code § 706.051(b)).
There are some exceptions to these rules, however. For example, child support and tax debts
can be garnished at higher rates, while defaulted federal student loans are garnished at different rates under federal law. Additionally, some types of income, such as social security and disability benefits, are exempt from wage garnishment.
It is important for individuals and businesses to understand their rights and responsibilities
when it comes to debt collection and wage garnishment. If you owe a debt, you may be contacted by a collection service and if you are unable to pay a debt, you may be subject to wage garnishment. Nevertheless, collections services are subject to strict regulations and cannot engage in abusive or unfair debt collections practices. If you are facing wage garnishment, you may be able to negotiate a payment plan with your creditor or seek the advice of a qualified attorney.
In conclusion, collection services and wage garnishment are important legal concepts that
affect many individuals and businesses in California. Understanding your rights and responsibilities under California law is crucial when it comes to debt collection and wage garnishment.
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Whether you are a debtor or creditor, it is important to seek the advice of a qualified attorney
who can help you navigate these complex legal issues. Our firm prides itself on one-on-one
consultations with an experienced attorney who can assist you in making the best decisions for your particular financial situation.
Contact us today for an initial consultation:
Castellan Law Group APC
1100 W La Habra Blvd.
La Habra, CA 90631
Tel: (626) 662-0286
This is for general information purposes only and is not intended to constitute legal advice. Connection and communication to this law firm via email or other electronic transmission do not constitute an attorney-client relationship with Castellan Law Group, APC unless a separate written agreement is signed by you and Castellan Law Group, APC as to the nature of any relationship and the amount to be charged for the intended legal services.