- Judgment-creditors may garnish wages in California.
- The amount available for garnishment varies with the type of debt.
- Judgment-debtors can apply for an exemption using form WG-006.
Are payday lenders permitted to contact your employer and seek out a garnishment of your wages without a court order?
I had seen a previous response from you regarding storefront payday loans and garnishments. I am wondering if the same holds true for online payday loans? Are they permitted to contact your employer and seek out a garnishment of your wages without first having filed suit and obtaining a judgment? I am working with a debt settlement/consolidation group and was advised to put stop payments on the payday loan companies. This particular company had me sign something that allowed them to garnish my wages if I defaulted. Are they permitted to do this under California law?
The waiver/statement/document you signed that allows the creditor to garnish your wages without a court order is rubbish. An experienced and properly trained human resources or payroll administrator would laugh if such a document crossed their desk.
However, not all human resources or payroll people are experienced or trained and may be bamboozled by an illegal wage garnishment order if it is dressed up with intimidating legal language and arrives in an envelope from an attorney’s office. I suggest you locate your human resources or payroll person and have a confidential conversation with about your situation. Ask if they have handled wage garnishments before.
In California, a creditor is required to file an Application for Earnings Withholding Order (form WG-001) and Writ of Execution (form EJ-130). A completed Writ of Execution will contain a stamp from the California court and a signature by a clerk of the court. An experienced human resources or payroll administrator will recognize an authentic Writ of Execution and will not be fooled by whatever document the payday lender will provide. (See the California Franchise Tax Board document Wage Garnishment / Earnings Withholding Order and Small Claims Forms: Collections (for Debtors))
Other states will handle wage garnishments differently, but the basics are the same: A court must order a garnishment unless the garnishment is related to tax liability or the repayment of a student loan.
Assuming for the sake of argument that a judgment-creditor begins the wage garnishment process, judgment-debtors can apply for an exemption. In California, judgment-debtors who are about to have their wages garnished should read California form WG-003 and then complete form WG-006 to apply for an exemption. Do so immediately -- a wage garnishment is much easier to prevent than unwind if you are exempt from garnishment.
I hope this information helps you Find. Learn & Save.
Dealing with debt
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q2 2022 was $16.15 trillion. Student loan debt was $1.59 trillion and credit card debt was $0.89 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1.739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in New Hampshire credit card delinquency rate was 2%, and the median credit card debt was $471.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.