Legal Question in Credit and Debt Law in California

Re: Bank loan for a car purchase

In order to "garnish" your wages, the bank will first have to repossess the car, sell it at auction, then obtain a judgment against you from a court. The only way an employer can be forced to pay any amount of your wages to any creditor is if the creditor has a court order permitting that to occur.

In order to get a judgment against you, the bank will have to serve a summons and complaint (or a plaintiff's claim if in small claims court), and you will have the opportunity to "answer" that complaint. If, within thirty (30) days after being served with the summons and complaint you have not answered, the creditor can then ask the court for a default judgment. However, you should be given notice of that request, and will know that it is coming. After judgment is entered, they can then ask the court to allow them to garnish your wages.

After the court allows the garnishment, you will again be notified, and given the opportunity to file what is known as a "claim of exemption." The claim of exemption can be filed with the levying authority, and allows you to explain why your wages should not be garnished. This procedure is statutory in nature, and there are certain valid reasons why your wages may not be garnished.

If you are served with a summons and complaint, or if you ultimately receive a notice that your wages are being garnished, you should immediately talk to an attorney so that you do not inadvertently lose any of your rights.

Remember, if a creditor gets a judgment against you, it is valid for ten (10) years, can be renewed for additional periods of ten (10) years, and will accrue interest at the rate of 10% per annum until paid.

Bottom line is, DO NOT simply ignore this problem!