Determine what is the correct amount that can be taken under Current CA law
Federal and state law determine how much can be withheld by your employer per paycheck to be turned over pursuant to an Earnings Withholding Order. The first link, below, is to the Cal. Judicial Council's Wage Garnishment forms. Open form WG-002, which at the bottom of page two, has a chart for the proper amount the employer should withhold. That formula is based on pay period and your "disposable income," which is the amount after standard withholdings, such as taxes, disability, and state retirement. The amount was raised in 2013 by Cal. AB 1775. The current WG-002 form, updated as of July 1, 2013, shows the correct amount in California, which has a higher exemption floor than the previous formula, as the floor is now 40 times the California minimum wage. Use the amount that you believe your next paycheck will be, to estimate how much will be deducted for the wage garnishment. Ensure that your employer received the current form.
Tip 1: Update your W-4 Form with your employer, which may reduce the garnishment amount
If your wages will be garnished, the first thing you can do is update your IRS W-4 form with your employer. The more deductions you have, the greater your net pay, and the more that will be garnished. If you have no deductions, then more taxes will be withheld, which will reduce the net paycheck for computing the amount to garnish. Be advised, this will make your income tax refund greater and reduce your next paycheck, so you will then need to live on less money.
Tip 2: Update your W-4 Form with other employers, to increase take home pay
If you work at another employer or if someone in your household works, by lowering the number of allowances on that employer's IRS W-4 Form, you can offset the lower take home pay from the paycheck being garnished. Please note that this person may owe more in taxes at the end of the year, because less income tax was withheld. Be sure that the person has some funds set aside for the tax bill.
Applying for a Claim of Exemption
If the garnishment amount is more than you can afford, you can apply for a claim of exemption. Accurately complete Judicial Council Forms WG-006 and WG-007 and file these with the sheriff or marshal, which ever entity is overseeing the wage garnishment in your case. If the other side (the plaintiff's attorney) objects to your claim, the court will set a hearing to determine what amount, if any may be garnished. In other words the court will notify you of a hearing date for you to explain why the Court should reduce or eliminate the amount to be garnished. If the other side does not object, then your claim of exemption is automatically granted and nothing should be garnished.
Presenting your claim of exemption in Court
If this is your first time asking the court to lower or eliminate the amount to be garnished, be prepared with documents to explain why you cannot afford the formula amount to be withheld. For instance, bring copies of documents proving your rent, monthly bills, and other essential obligations. Your documents should support the amounts shown on your Financial Statement form. If they do not correspond, then you may need to explain why, if the judge asks. If you have dependents, bring them and bring a copy of your tax return showing that you have claimed them in the past. Bring three copies with your personal information carefully scratched out, to ensure privacy and prevent identity theft, which can result from carelessness with Social Security Numbers, drivers license number, date of birth, and account numbers. Ask one or two people you know to help you prepare for the hearing, such as listen to you present the facts of your family needs. Prepare for questions from the judge.
Reconsideration if the court denies your claim of exemption
If you have applied before and the court denied your claim of exemption, you can apply again, especially if your financial information has changed since the last time. If your financial information is the same, but you simply cannot afford the formula amount, before you apply again, consult with an attorney in your area and present your paperwork to him or her, to get specific tips on improving your chances with the judge. The last link (below) is to consumer lawyers, but you may qualify for a free legal clinic. The middle link is a list of free legal clinics in California, but your local courthouse may have a list of additional local clinics.
No garnishment for an invalid default judgment
Without proper service of process of the summons and complaint on each defendant, that party has not been given due process under the law, and should not be liable for a penny of the judgment amount, until proper service is completed and a valid judgment entered. Many lawsuits are not properly served, making the default judgment invalid. If this may be your situation, you need an experienced attorney who can evaluate the paperwork and see if the default judgment can be set aside. Contact a lawyer soon, as there are time limits from when you first learned of the lawsuit or judgment. Contact me through my Avvo profile, if you would like my assistance. I have been helping California consumers with collection cases and debt collectors since 1997.
Priority Among Garnishment Orders: 1. Support Orders, 2. Taxes, 3. Others
If there are multiple orders to garnish your wages, there law has a priority system. Earnings assignment orders for support are not limited by the rules discussed in Section 1 and take priority over everything else, even taxes. If the amount paid on a support order, meets or exceeds the maximum garnishment formula discussed in Section 1, above, then no other garnishments may be honored and the employer should advise the levying officer of this fact. Garnishment to pay a tax bill have priority over other types of garnishments. For more than one tax debt, the first one served on the employer takes priority over the ones that follow, which cannot be paid at all. See Code of Civil Procedure Secs. 706.077(b), 706.104(b). If your employer is taking too much or is not applying the priority rules correctly, you should bring this to the levying officer and court's attention by filing a claim of exemption.
Plan B: Bankruptcy
After all of your efforts, if the court rejects your claim of exemption and you cannot afford the amount being garnished, consult a bankruptcy lawyer in your area. Even if you don't qualify for Chapter 7 Discharge, you should qualify for a Chapter 13 Payment Plan. Chapter 13 allows you to advise the Bankruptcy Court to set a workable, fixed monthly amount to repay your creditors over a period of years. The great thing about bankruptcy is that many of your debts will no longer accrue interest and some of your debts may be eliminated if not properly proven. I don't do bankruptcy cases, but the last link, below, is to the National Association of Consumer Advocates, to help you find a consumer lawyer in your area, who can assist you.
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