California Collection Laws

What are California's laws regarding wage garnishment, levy, lien, foreclosure, and payday loans?

A collection agent is threatening to sue me. My questions is, what can they do? Garnish my wages? Seize my car? Take my 401(k)? I live in California.

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Bill's Answer
(5 Votes) Team



  • California allows wage garnishment and bank account levies.
  • The California statute of limitations on credit card debt is four years.
  • Consult with an attorney to learn more about your rights and liabilities.

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, and a lien on the debtor’s property. A creditor that is granted a judgment is called a “judgment-creditor.” Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

In California, the following cited laws are found under the Code of Civil Procedure unless specified.

California Wage Garnishment Law

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

n most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Wage Garnishment article to learn more.

California allows wage garnishment (CCP § 706.010-706.011). In general, California follows the federal rules for the amount of a garnishment, which allows up to 25% of a worker’s wages to be garnished. For exemptions, CCP § 706.05 and § 703.010-703.150 define earnings and what is considered exempt. Municipal and state employees may be garnished. See the resource California Wage Garnishment additional discussion on wage garnishment.

See the Dept. of Labor’s Employment Law Guide - Wage Garnishment and the Dept. of the Treasury's Answers About Garnishments.

Generally, 401(K) or other retirement funds are exempt from garnishment. It is advisable to have those funds deposited into a separate bank account if you are concerned about garnishment on those benefits.

Levy Financial Accounts

A levy means that the creditor has the right to take whatever money in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. In some states levy is called attachment or account garnishment. The names may vary but the concept is the same.

In California, a levy or attachment, is allowed under Section 699.510-699.560. Levy is allowed if the plaintiff possesses a legal instrument known a writ commanding the levying officer to seize and sell as much of a debtor’s property as is necessary to satisfy a creditor’s claim. See Section 700.010-700.200 for specifics.

If you reside in another state, see the Account Levy resource to learn more about the general rules for this remedy.

California Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay the judgment.

California allows a lien for a money judgment. Under Section 697.510-697.670, mechanics and contractors (and similar laborers and professionals) have the right to place a lien on real property (697.310 through 697.410) or personal property (697.510 through 697.670). This also includes creditors for unsecured debt (credit cards, auto loans, et cetera), see Civil Procedure Code Section 697.010-697.060. Exemptions are covered under Section 704.010-704.210. A lienholder on a residence may not foreclose. However, if a lienholder of personal property may demand the sheriff seize the property and auction it to satisfy the lien.

If you reside in another state, see the Liens & How to Resolve Them article to learn more.

California Writ of Replevin

Replevin means an action for recovering goods wrongfully taken or detained. Four California statutes cover replevin. One concerns the recovery of public records from a private party. A second concerns recovery of property before the commencement of civil litigation (Civil Procedure Section 512.010). A third concerns a post-judgment writ of possession (Section 712.010), and the fourth concerns the repossession of a manufactured home, a mobile home or real property (Sections 1166a, and 712.010 et. seq.). The fourth is usually applied when a landlord seeks to eject a tenant from a property.

California Statutes of Limitations

Each state has is own statute of limitations. Under California law, the statute of limitations is governed by Section 335-349.4. The statute of limitations on an open account (i.e., credit card) is 4 years, written contracts 4 years, real property actions 5 years, foreign judgments are valid for 10 years, and domestic judgments are valid for 10 years (and can be renewed at 10 years).

ollection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

California Foreclosure

For information on California foreclosures, see article Is My HELOC a Recourse or Non-Recourse Loan in California? for a discussion of the differences between recourse and non-recourse loans. See also Mortgage Debt and Community Property to learn how California’s community property laws affect foreclosure.

California foreclosure laws are found in Civil Code Section 2920-2944.7. To learn more about the rules surrounding foreclosure in this state, including deficiency balances see CP Section 580d and Section 2938(e)(3).

California Payday Loan Collection

See the resource Payday Loans to learn how California Civil Code Section 1789.30-1789.38, and specifically Section 1789.33, protects consumers of payday loans. Defaulting on a payday loan is not a crime in California, and collection agents suggesting the contrary are misinformed.

California Repossession Rules

The repossession agency must notify the borrower by mail or in person within 48 hours after repossessing a vehicle.

The seller or holder must give 15 days’ notice of intent to sell a repossessed vehicle to all persons liable on the contract (CC §2983.2(a)), except when the vehicle was seized by a public agency, such as a car seized by the police for transporting illegal drugs (CC §2983.3(b)(6)).

The notice of intent to dispose of a repossessed vehicle must advise all persons liable on the contract of their rights to redeem the vehicle, reinstate the contract, request a 10-day extension of the redemption and reinstatement periods, and request a written accounting of the disposition, and must give notice of the borrower’s possible liability for a deficiency judgment. (CC §2983.2(a)(1)–(9)). The seller must provide a full accounting for the disposition of the vehicle to any person liable on the contract on written request or if there is a surplus. (CC §2983.2(b)–(c))

California Collection Agency Law

Collection agents need not be licensed in California. The California Fair Debt Collection Practices Act (CFDCPA) is sometimes referred to as the Rosenthal Fair Debt Collection Practices Act (RFDCPA). The CFDCPA mirrors the FDCPA in most respects, with two exceptions. The first is original creditors are covered by the CFDCPA. By contrast, the FDCPA covers all collection agents and, in some circumstances, original creditors.

The CFDCPA’s second difference concerns how collection agents must use the legal process. California collection agents must:

  • Serve you with notice of a lawsuit when it sues you. If it gets a default judgment because it failed to serve you with a lawsuit notice, it may not collect on that judgment.
  • Sue you in the county where you either:
    • Incurred the debt
    • Lived when you incurred the debt, or
    • Live now
  • Not send you a document that appears to have been issued, authorized, or approved by a government agency or attorney when it wasn’t.

Violation of the CFDCPA may be a criminal misdemeanor. If you have been victimized by a collection agency, file a report of the violation with your local city or county district attorney or prosecutor. Consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. These laws are found in California Civil Code § 1788.


Consult with a California attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in California. See also the State of California Dept. of Consumer Affairs document Collecting or Satisfying the Judgment for more information about California’s collection laws.

I hope this information helps you Find. Learn & Save.




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  • LT
    Nov, 2012
    Im a bit confused as to how much can be garnished from California residents? I was employed with a company who did their own book keeping and was being garnished for child support $369.00 bi weekly and debt 0f $11,000.00 that was paid off in a little over a year. I was making $15.00 an hour with 40 hour weeks and my take home pay was $436.00 bi weekly?? I addressed the issue with supervisor/owner/book keeper and she stated that per California state law two places can garnish from my check at the same time up to 75%??? Is this information correct, please help thanks.
    0 Votes

    • BA
      Nov, 2012
      Your employer is wrong, wrong, wrong, unless the garnishments are related to delinquent child support payments or tax debt.

      If your wage garnishments are related to child support, then up to 60% of your wages can be garnished. Child support-related wage garnishments have priority over other wage garnishments. In other words, they immediately go to the front of the line if there are other wage garnishments in effect.

      Let us assume for the sake of argument the two wage garnishments were from judgment creditors, and were not related to child support or taxes. Under federal law (the Consumer Credit Protection Act Title 3) and California statute (CCP § 706 et seq.) only the amount greater than $217.50 per week may be garnished where the disposable earnings are $290 per week or less. You mentioned your take-home pay (which the law calls "disposable earnings") is $436 every two weeks. I will assume you work about the same number of hours per week. According to my math, your disposable earnings are $218 per week. This means $1 per pay period can be garnished from your pay check.

      Acquaint your employer's payroll person with Wage Garnishment: A Guide to Understanding Court-Ordered Wage Garnishment and Your Options to understand California's rules, and the Dept. of Labor's The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title 3 (PDF) to learn the federal rules.
      0 Votes

  • JW
    Oct, 2012
    Is it safe for someone with severe debt to purchase property in their own name? I have some $50,000 in debt which has been delinquent over 4 years now. It's mostly from credit cards but there is some student loans, medical and misc. All of the debt was accrued in California, though I currently reside and work out of state. According to my credit report there was a judgment filed for $25k in Dec of 2008 by a credit card company and there are five different collection agencies listed who have made "Account Review Inquiries" as recently as yesterday. That said, I've never actually been bothered by creditors, possibly because I didn't fill out a W-2 for several years or because my mailing address and phone number was inconsistent. Now... I'd like to purchase a small piece of vacant land (not in California) and I'm concerned that if I put my name on the deed someone will come after it. The full market value of the property is listed at $6,700 but the selling price would be over $20,000. There would also be another name on the deed. Could a collection agency put a lien on the property if my name is on the deed? How would that work? Are they likely to do so for property valued at that amount? Thanks ahead of time for your help. The service you provide here is invaluable. Not only is the information clear and thorough, it is very comforting. Your tone isn't judgmental or condescending, which is a huge relief when dealing with an issue that often carries such shame. Thank you, Bill. z/s
    0 Votes

    • BA
      Oct, 2012
      I can't give you legal advice, as only an attorney can properly do so, but I will share a few thoughts.

      A creditor with a judgment against you could obtain a lien that would encumber the property you buy. If they become aware of your ownership, through some public records search, for instance, it seems reasonable to expect a lien to be filed.
      0 Votes

  • AM
    May, 2012
    I recently found out that there was a lawsuit and lien judgement against me in Los Angeles for a credit debt. However, I was never served and did not go to court because I was unware of the suit. Additionally, this debt was about to exceed the california statute of limitations, so the attorney office representing the original credit company submitted the suit right before the SOL. I would like to buy a home now. Does this lien affect the purchase of a home in Los Angeles? Or would I only be affected if I tried to resell the home?
    0 Votes

    • TP
      May, 2012
      I only know this because I talked to about 5-10 different lenders and if you have a public record on your credit file you will not be able to get a loan for a home. My husband had a judgement against him and it was reported on only one of his credit reports and we weren't able to get financed (we live in So Cal) so luckily for us his fell off after the ten years and they didn't renew it. But the lenders we talked said we would have had to pay it and then go through the courts to get it show as paid. Hope this helps :)
      0 Votes

    • BA
      May, 2012
      The company was within its rights to file suit against you before the SOL expired. In fact, in most states a creditor can even sue you after the SOL has passed, though you can use the SOL as an affirmative defense. In your situation, the lawsuit being filed before the SOL expired negates you using the SOL to protect yourself.

      This matter could be a big problem for purchasing a home, depending on when the judgment shows up on your credit report and how the debt is now reported. As things currently stand, you may have to pay off the collections account to qualify for a mortgage loan, depending on the size of the debt and its age. If it goes to the point where a judgment appears, it is almost certain that lenders would require you to satisfy the debt before they would approve your application. You also want to avoid a judgment, if possible, to avoid the harm it will cause to your credit score.
      0 Votes

  • KH
    Jan, 2012
    We purchased our home in 1992 for $189450. Right now after 19 yrs its valued at $285000. At the time of the crash when people lost jobs and homes, my husband lost his job and I became disabled. Our payments then where $2080.00 Plus and equity line or $75000 at $400.00. Needless to say we could not pay either one. So for the next year and half we made no payments to either one. My husband found a job. We tried working out a mod with the second loan, they would not do it. BOA was willing to,so after 3 years we have a modified loan at $1437.00 a month. BoA took the 13 or 14 mo we didnt pay and added them to our loan, at a 40 yrs, at 3%. As for the Equity line,Citibank,by now it was with a collection compay, continually adding interest and late charges everymonth with the total now at $87000! They refuse to take anything less than $300 a month(we cant do it) My question is...are they allowed to keep adding interest and late charges once it goes to a collection agency? Is there a statue of limitations on collections of this loan? My fear is, I really dont know if we will ever be abel to pay it, I had to retire, his job is much less than the one that closed up. We barely make ends meet, how can we meet all of our obligations?
    0 Votes

    • BA
      Jan, 2012
      Most likely the loan was called in and late charges and rates were taken on the full balance of the loan. Regarding the legality of the charges on your home equity loan, you will need to refer to your loan agreement versus the statements sent to you. The collection agency will be able to charge interest rates, pursuant to your agreement, but not more than allowed by state law. The $300 charge most likely covers interest only. The creditor is not interested in a negative amortization. Since you already lowered your first mortgage to the lowest available limit, there is not much left to do in terms of lowering your mortgage payments. Since it sounds as if you have positive equity in the house, your best solution, may be to negotiate a lower pay off with the creditor, and sell the house.
      0 Votes

  • JT
    Jan, 2012
    My brother and I owned a condo in Florida. We currently reside in California. Due to our financial situation, we were forced to quit making payments on our HOAs and our mortgage for our FL property (that was for 2 years our primary residence), in order to pay for food and other life necessities. We sold our property in a short sale in January 2011. Our first and second mortgage lender wrote off our loan balance. The HOA association was paid approximately 1/3 of the balance of unpaid HOA dues at closing of the short sale. Our real estate agent, that facilitated the short sale for us, represented to us multiple times via email and calls that he "got the HOA to settle for the what we paid them at closing". We can forward email chains with the agent for verification of the fact that we understood the payment to be a settlement in full. However, fast forward to now and the HOA is claiming that they gave our agent an estoppel letter during the short sale that says that the money paid to them at closing is only to allow the property to sell for the short sale (basically we're paying them off so they'll release their claim on the property to let it sell on the short sale) and now they are asking us to pay them the entire balance of delinquent dues. We were never shown the estoppel letter, never agreed to it and never signed it. Given it's ridiculous assumption (i.e that nothing paid at closing would be a credit and that this is not a full settlement) we would never have agreed to it, had it been shown to us. Furthermore, in May of this year, the court filed a notice "Dismissing Case, Cancelling Foreclosure Sale, Cancelling Notice of Lis Pendens, Setting Aside Final Summary Judgment and directing Clerk to return original loan documents and to substitute photostatic copies in the court file- hereby dismissed, cancelled, set aside directed and substituted. Clerk Close File." We feel that there is no merit whatsoever to the HOA's claim that we owe them money, that we fully settled at closing and furthermore, the judge dismissed any outstanding claim they make think they have against us. We'd like to know if we have anything to worry about and if so, how to protect ourselves from the HOA association (which is based in Florida) trying to come after us as California residents. Thanks in advance for your assistance and advice. It is greatly appreciated.
    0 Votes

    • BA
      Jan, 2012
      I cannot estimate your liability without reading the HOA's letter sent to the real estate agent, or the notice you mentioned that the court filed. Your safest course of action is to hire a Florida lawyer to research the issues you mentioned, including locating the crucial HOA's letter to your agent.
      0 Votes