Legal Question in Credit and Debt Law in California

Assuming that they obtain a judgment for the deficiency, then they can garnish your wages and levy assets including your bank accounts. The only way to prevent that from happening is to (1) file bankruptcy, (2) negotiate a settlement with the lender or (3) make a claim of exemption in response to the wage garnishment and/or levy on your bank accounts. The bad news is that the lender, with a judgment in hand, is not limited to taking your tax return. They can take wages with certain, very limited exceptions. They can also levy bank accounts, again with certain, very limited exceptions. Take a look at form EJ-155 on the Judicial Council's website (www.courtinfo.ca.gov). This is a list of exemptions you can claim when served with a bank levy, wage garnishment or other asset levy by the lender after they have a judgment. You then have to file a claim of exemption with the Court based on those exemption laws. The amounts in these exemption laws are slightly higher than those shown on the form as they are adjusted annually, and this form appears to have been last updated in 2005, but you can see they aren't great. You will very seriously want to consider consulting with a local attorney to discuss how you might settle this, file bankruptcy or avoid collections.

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