Do wage garnishments in California result in timely repayment?

Do wage garnishments in California result in timely repayment?

On Behalf of | Jul 26, 2023 | Firm News

Creditors in California that are owed money by individuals who seem eager to avoid their responsibilities have options. While both state and federal law regulate collection efforts in an attempt to prevent abuses, the laws intended to protect consumers often put businesses owed money by individuals at a legal disadvantage.

However, these organizations have options to pursue collection activity, but those who intend to defraud their creditors can learn about and abuse those rules for personal benefit. They might frequently change phone numbers or move so that creditors cannot successfully serve them with lawsuit paperwork. They might return letters unopened so that they can claim they never received notice of a debt.

When a creditor locates a debtor and chooses to take them to court, wage garnishment is one of the options that they might pursue. Will wage garnishment realistically result in the faster repayment of an outstanding debt?

California does limit garnishment

Both Federal and California state laws place certain restrictions on wage garnishment efforts. At most, creditors in California can seek to claim 25% of someone’s disposable take-home compensation. However, those who earn lower wages will likely be subject to a different withholding standard. California also limits garnishments to at most 50% of the wages earned beyond 40 hours of minimum wage pay.

Regular payment is better than nothing

If someone works in a poorly compensated position and makes just above minimum wage, a creditor may only receive $100 a month or even less toward an outstanding debt owed by that party. However, when the alternative is someone continuing to completely avoid their financial obligations, those small monthly payments may be the best option available for a creditor.

Wage garnishment can be slow, but that doesn’t necessarily mean creditors will have to give up on their right to repayment. Although the judgment may no longer show up on someone’s credit report seven years after the courts enter it, creditors will still have the right to continue garnishing wages until they receive full repayment for the amount owed by the debtor, plus interest.

Organizations that learn more about California’s rules for wage garnishment and other forms of collection activity will be in a better position to hold people accountable for past-due debts.