The Power Of A Monetary Judgment

How Long Is The Monetary Judgment Valid?

This judgment is valid for ten years, after which it will automatically expire. However, a judgment can be extended for another ten years at the creditor's request. Further, under California Law, interest accrues at 10 percent per year on the principal amount of a money judgment remaining unsatisfied. After ten years, upon renewal, the judgment is effectively doubled, so it's best to pay it as quickly as possible.

How Long Does A Creditor Have To Collect A Monetary Judgment?

There is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement in California.

What Should I Do After A Monetary Judgment Has Been Ruled Against Me?

After the court orders a monetary judgment, you should arrange to pay it as soon as possible. An initial option is to ask the creditor to allow you to pay what you owe on a weekly or monthly basis. The most straightforward way to get the payment process set in California is to immediately fill out a Stipulation for Time Payments form. If you do not pay what is owed, the creditor can start collecting the judgment using different legal options, which could also lead you to be responsible for the costs of the collection methods, which will be discussed below.

What Are The Ways A Judgment Can Be Enforced?

There are several methods the court can use to enforce a judgment. They are as follows:  

• A Wage Garnishment
• A Levy (Seizure) Of Personal Property
• A Lien Against Your Personal Property

How Does A Wage Garnishment Work?

If the party who is ordered to pay does not initially pay the judgment against them, the court has the power to "garnish" their wages. The successful party can request this through an Earnings Withholding Order. This is also known as a "Garnishment Order" where the court instructs an employer to pay some of the money owed from the debtor's wages. 

How Much Can My Wages Be Garnished?

Under California law, the most a person's wages can be garnished is the lesser of either 25% of your disposable earnings for that week OR 50% of the amount by which your weekly disposable earnings exceed 40 times the state hourly minimum wage. If the debtor works in a location where the local minimum hourly wage is greater than the state minimum hourly wage, the local wage is used for the calculation. However, under California law, the amount of wage garnishment can be decreased if the debtor can show that the wages are necessary for their support or the support of their family. 

When Does A Wage Garnishment Begin?

A debtor's earnings will start being withheld ten calendar days from when an order is received. If the employee's pay period ends before the 10th day, earnings for that pay period will not be withheld. A debtor should start withholding from the first pay period that ends on or after that 10th day after receiving the earnings withholding order. The debtor should keep withholding for all pay periods until the amount due has been withheld as stated in the order, plus any additional amount for costs and interest. The Sheriff will let the employer know the additional amount the employee owes for costs and interest. Do not withhold more than the total of these amounts.

How Does A Levy (Seizure) Of Personal Property Work? 

If a debtor does not pay the judgment, the creditor can also obtain a levy or "seize" the property to pay the debt. A levy is different from a lien because a lien is a claim against property to secure the payment of the debt and a levy takes the property. 

When a court orders a levy, the Sheriff is told to take the debtor's personal property, such as the money in a bank account, a car, or a boat. When the Sheriff takes the debtor's property, a Notice will be given. It is possible to have some property exempted from seizure, and to do so, a debtor has ten days after the Notice is given to file a Claim form with the Sheriff, not the court, to try and keep specific property from being seized. If the creditor opposes the exemption, it will go back to the court to decide. 

A list of what can be excepted from seizure (levy) includes things such as health insurance benefits and veterans benefits. The list of items can be found here.