Individuals who have a significant amount of personal debt may not prioritize paying their creditors. Frequently, frivolous spending takes priority over fulfilling obligations to other parties. That is especially true when a creditor is a business, not an individual that the debtor knows personally.
People who are behind on their debts can come up with countless excuses to explain why they have not fulfilled their financial obligations to others. There is always another expense or source of hardship to explain the failure to pay. When people don’t want to pay their debts, they find ways to justify their conduct to themselves and others.
Businesses owed money by individuals may eventually decide that they need to take legal action to collect on the amount still owed. A lawsuit against an individual debtor can lead to a judgment, which can then potentially allow a creditor to garnish the debtor’s wages. Is pursuing wage garnishment worthwhile for a creditor owed a significant debt by an individual?
California law limits wage garnishment
In most cases, wage garnishment is a way to reduce the debt owed over time rather than paying it in full quickly. The creditor who secures the judgment may only receive a small amount from each paycheck earned by the debtor. Wage garnishment may lead to a slow trickle of payments on an account previously in bad standing, which can be better than receiving nothing at all.
Current rules limit how much of a debtor’s income is at risk of garnishment when they fall behind on their financial responsibility. The party requesting the garnishment can receive at most 20% of the debtor’s disposable earnings.
Other times, the creditor can obtain up to 40% of the amount that the debtor’s income exceeds 48 times the state minimum hourly wage. The rules in California state that the creditor seeking the garnishment must accept the lesser of the two amounts.
In cases where someone has proven resistance to fulfilling their financial obligations, wage garnishment may be the only means of securing repayment, even if the repayment process is relatively slow. In some cases, wage garnishments might be the best solution available to a creditor frustrated by a lack of good faith efforts on the part of a debtor.
Learning more about California’s unique debt collection statutes can be beneficial for those dealing with recalcitrant debtors who don’t want to fulfill their financial obligations.