How to Stop Wage Garnishment in California

Filing Bankruptcy Stops the Garnishment Order

Oct 25, 2009

Although there are ways to postpone or stop wage garnishment, most people end up having to eventually repay their debt in full unless they declare bankruptcy.

Wage garnishment in California cuts 25% from the net paycheck. For most, a 25% cut in net pay results in financial ruin. Unfortunately, it's the most effective way for creditors to get paid in this state because there are few ways to stop it.

Filing For Bankruptcy to Stop Wage Garnishment

Filing bankruptcy stops garnishments temporarily due to the bankruptcy court's automatic stay by which creditors cannot take actions against the debtor. In a chapter 7 bankruptcy, most debts from wage garnishment are wiped out. However, tax debt, alimony, child support, and student loans are examples of debts that may not be wiped out by bankruptcy.

Due to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), those who earn more than $60,000 per year may be required to enter a chapter 13 repayment plan instead of chapter 7. Even if chapter 13 is the only available option, it reduces the amount ultimately repaid and does stop the wage garnishment.

Stop Wage Garnishment Due to Improper Service

If the defendant did not know about the wage garnishment until notified by the employer, there may have been improper service by the plaintiff's process server. The defendant would have had no opportunity to show up in court to defend himself, which results in a summary judgment for the creditor. In that case, the defendant should get help from an attorney to ask the court to stop the wage garnishment due to improper service.

Even if the wage garnishment order has been stopped due to improper service, the lender can still serve the defendant properly the second time around and proceed with a new garnishment order.

If the defendant cannot pay for the basic necessities after the 25% reduction in net pay, he can file a claim of exemption (form WG-006) with the levying officer to stop the wage garnishment. Proof of income and expenses need to be included which shows that the wage garnishment would not allow payment of basic living necessities. A lawyer can help file this form properly with maximum chances of success.

If the wage garnishment resulted from a small claims court case, file form SC-106 with the court to request repayment in installments due to financial reasons. A financial statement needs to be included with form SC-106. The creditor can oppose the petition but they must have a reason. In the end, it's up to the small claims court judge to decide whether to force repayment to be changed to an installment plan. Keep in mind that success with form SC-106 still results in having to pay the creditor back in full.

If none of the above works, then it's time to notify the creditor to negotiate an installment plan. In most cases, the creditor will want a sizable lump sum payment before agreeing to the installment plan. If an installment plan cannot be negotiated with the creditor, the only way to stop the wage garnishment when nothing else works is to file for bankruptcy.

The copyright of the article How to Stop Wage Garnishment in California in Bankruptcy is owned by John Wu. Permission to republish How to Stop Wage Garnishment in California in print or online must be granted by the author in writing.