Sacramento, CA – 25 August 2020 – Today at 11:30am PST, an online press conference will be held to discuss a new law that is going into effect in California next week that sets limits on the amounts that debt collectors can garnish from an individual’s bank account when seeking repayment on unpaid debts.
SB 616, was signed into law by Gov. Gavin Newsom last October and is scheduled to go into effect on September 1st. The press conference will take place at 11:30am ET on Tuesday, August 25. Details are available by clicking here. Sen. Bob Wieckowski, who sponsored the bill, as well as a number of individuals from advocacy organizations across California will be featured in the conference.
California currently provides a judgment debtor with 10 days after the notice of levy is served to claim their exemptions and gives a creditor 10 days to oppose the claims. Additionally, the State already specifies the maximum amount of a judgment debtor’s disposable earnings that are subject to a garnishment, exempting 75% of paid earnings of an employee if, prior to payment to the employee, the earnings were not subject to a withholding order or assignment order for support.
In other words, a creditor can garnish up to an amount that is the lesser of either 25% of a debtor’s weekly earnings or 50% of the amount by which the debtor’s earnings exceed 40 times the minimum hourly wage, and there is no minimum balance that a debtor’s deposit account must remain after being garnished.
Under SB 616, beginning September 1, 2020, debtors will have 15 days to file a notice of claim of exemption if the debtor was personally served with the notice of levy and 20 days if the debtor was served with the notice of levy by mail. Creditors now have 15 days to oppose the exemptions claimed by debtors.
Under the new law, collectors will be prohibited from garnishing the last $1,788 that individuals have in their bank accounts. That amount allegedly represents the minimum amount that a family of four needs to survive and will be adjusted every year. When the law was first passed, the threshold amount was $1,724.
For individuals with multiple accounts at the same institution, judgment holders will be able to request a hearing before a judge to determine how the exemption should be applied. The same is true for individuals who hold multiple accounts at multiple institutions. There are a handful of exceptions to the law, including:
- Judgment for wages owed, child support, or spousal support
- A provision of the Public Resources Code, Revenue and Taxation Code, or Unemployment Insurance Code
- A warrant or notice of levy issued by the state, or any department or agency thereof, for the collection of a liability.
“Families are hurting and wondering how they are going to survive financially,” said Wieckowski, in a statement. “Having this law in place will give them some badly-needed security in these tough times.”
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