Legal Question in Credit and Debt Law in California

In California the creditor may sue you to recover the amount due. Once a judgment is entered against you the creditor can seek a variety of avenues to collect on the judgment. However, they cannot garnish your social security payments. They can, however, seek an order of the court allowing them to sell your house. Most creditors do not do so, however, because the process is expensive and potentially lenghty. They first must prove to the court what encumbrances exist against the property and the amount of equity you have in the property; next they must show that after paying all of the encumbrances, the costs of sale, and paying you whatever your homestead exemption might be, they will be able to apply some amount to reduce the amount of the judgment. For example, assume you have a house worth $100,000.00, you owe $50,000.00 and your homeowner's exemption is $50,000.00; the creditor will not be able to sell the house because they won't even be able to pay the costs of sale, let alone have any money to apply to reduce the judgment.

The foregoing is for informational purposes only. To determine whether your creditor might be able to collect any judgment they might obtain, you should seek the counsel of an attorney in your area.