Bank Levy and Claim of Exemption Based Upon Extreme Financial Hardship

[Chien]

Well, in for a penny, in for a pound . . . .

With respect to ordinary Federal garnishment rules (Consumer Credit Protection Act, Title III) (those excluding bankruptcy, support payments or taxes), the weekly amount may not exceed the lesser of 25% of the debtor’s disposable income or the amount by which that income exceeds 30 times the federal minimum wage (currently $7.25/hr.) subject to a 25% ceiling. That said, why is it worthy of research and what does it have to do with the price of tea in China? This is not a Federal garnishment! (Why do some FA senior members feel the need to give info they know but which is irrelevant to what they’re asked?).

It’s not double-dipping because the total amount to be collected by all means will (or should be) reduced be reduced by any other means until full recovery is achieved. How that differs from double-dipping is a discussion for another time and place.

When posting more frequently, I occasionally mentioned the fact (with some perverse pride) that CA’s Enforcement of Judgments Act (CCP, Title 9 [680.010 – 724.260] is the broadest, most all-encompassing enforcement statute of any state. There are additional steps the creditor might have taken and may already have without your realizing it yet. “Quadruple or quintuple-dipping” was/is possible (they could seize and sell your relative’s “wagon and a mule” and/or assign licensing fees to “super widgets”) but not likely. The creditor simply chose the easiest and least expensive means also likely to be effective. They also want to quickly get ahead of any third-party priority claimants.

I don’t understand why the employer didn’t serve the wage garnishment notice immediately when it was received, unless there was an awareness of the bank levy when it was served and a hope it would be completely successful. Nobody likes a wage garnishment. Normally, it would mean exceptional bookkeeping for the creditor, the levying officer and the employer. Oh, well. Now it had to happen and you can file your Claim of Exemption all in one filing. You don’t need a separate one for each form of enforcement used. If nothing else, it will make things more difficult for the court to calculate and assess the financial position.

Zigner strongly urges that you consult a “pro”. Despite the fact that most litigants filing Claims of Exemption are in financial straits anyway and appear pro per, so the evidentiary bar is inclined to be “malleable”, I do as well. I do not encourage inexperienced litigants to “risk the pot” the first time in court, particularly in reliance on online advice. As a senior member of FA, you’ve gotten considerable attention. If you feel unprepared to provide assistance, by all means consult. I don’t know what would be said that hasn’t. There is no specific statutory exemption, but you read the Sacramento article. Consultation won’t be free. Get somebody who has actually done this before. To me, that would likely mean a consumer defense attorney with some years of experience. Make your choice.

Good luck.

 

[Zigner]

That said, why is it worthy of research and what does it have to do with the price of tea in China? This is not a Federal garnishment! (Why do some FA senior members feel the need to give info they know but which is irrelevant to what they’re asked?).

It's not irrelevant. It represents a "maximum".

 

[Chien]

Zigner – I happened to still be around and I did make it clear, as you all do as well, that my postings were my personal opinion. They were also directed to sandyclaus, and your name wasn’t mentioned in that context. Don’t get your bloomers in a wedgie, because that happens to still be my opinion and emphasizing your confusing interpretations of federal garnishment rules is not going to change it nor is your justification (?) my concern. You left your interpretation as half-articulated and in need of “further research”. Where is “further”? No, no – give it to Sandy – the subject is old-hat to me. Oh, and it’s still not a federal garnishment.

Actually, I’m just stringing you on. You could post the text of the whole Consumer Credit Protection Act
and underline “maximum” regarding garnishment rules and it wouldn’t make a difference to a discussion about a state garnishment in a state that does not adopt federal guidelines as its state rule.

What confused me more (and went unmentioned by me) is your reference to “limits on the amount that could be garnished” as a preface to the reference to federal rules. I would have thought that, by that point, the OP would confidently be assumed to have informed herself sufficiently to realize that those limits could reasonably be hoped to reduce the amount to $0. What was the point of posting if she didn’t? She didn’t want to know the maximum; she was/is trying to get to the minimum and ensure that’s $0 or as close as possible – I thought

I think your nose is bent that your suggestion to “hire a pro” didn’t evoke cries of jubilation. It was also the reason I tried to give her as much as was needed to DIY. As always, I have nothing invested in whose suggestions/advice/opinion an OP uses, if any. In the meantime, take comfort in all those posts – daunting.

 

[Zigner]

<shaking head>

If the Feds have a maximum amount, then the state can't allow a higher amount. The Fed amount would still have to be the maximum. Really - I was just clearing itup.

As an example:

"Da State" says that garnishments can take 90% of a paycheck, but the Feds limit it to 25%. What percentage is the maximum that can be garnished from a paycheck in my example? That's right, 25%.

 

[sandyclaus]

Really, guys? Do I need to separate the two of you and send you to your respective corners for a time-out?

Zig and Chien, I appreciate all of the information you gave me. The documents for the Claim of Exemption have been completed with your guidance, and the family member is off to the Sheriff's office tomorrow to turn them in and take his chances.

For both of you, I actually went to the FTB's website page for the Earnings Withholding Order to see what the withholding amounts on a garnishment should be for a California resident with court-ordered debt (https://www.ftb.ca.gov/online/Court_Ordered_Debt/earnings.shtml). That told me everything I needed to know. I also managed to review his paychecks for the last six months, calculate the disposable income, and get an idea of what they would plan to withhold on estimated future earnings. For California, for a bi-weekly paycheck, the breakdown is as follows:

• For amounts of up to $435.00, there is no garnishment
• For amounts of $435.01 to $580.00, they garnish everything above $435.00
• For amounts of $580.01 and above, they take 25%

As I calculated his earnings, his average disposable per paycheck is around $450.00, which means they would take a whopping $15 from each check for garnishment.

I meant it when I said he needed that exemption. His total bills right now run him around $800 a month for everything, and were it not for his CalFresh benefits, he couldn't even afford the cheap rental accommodations he was able to find - especially with his hours just being cut down to maybe one or two days a week for the foreseeable future.

Chien, we are anticipating that the creditor will want to oppose the Claim of Exemption on BOTH the garnishment and the bank levy, and with your suggestions, he is planning accordingly.

And no, Zig, there isn't a snowball's chance of him hiring an attorney to deal with this situation. There just isn't any money to do it.

 

[Chien]

A long time-out.

I reluctantly broke a self-imposed sabbatical from FA to address the question of one OP regarding a procedural matter unique to one court system, in one county, in one state and was prepared to leave happily thereafter.

Your issue was a fluke, and how you handle it is ultimately your concern. I simply wanted to assure you that what Sacramento was suggesting was feasible, and I knew because I had successfully counseled it too. I had no intention of discussing State vs. Federal garnishment, nor do I think it’s relevant or ever likely to become a legitimate consideration for the Court. If somebody had said before that the purpose was merely to clarify that neither California nor Federal garnishment would exceed 25%, s/he would have gotten no argument – move on.

To justify the fuzzy reasoning that would lead to beating that subject to death out of context by a hypothetical 90% state law is too ludicrous to postulate. I’d destroy my argument, offend the bench officer, get myself laughed out of court and deserve it. So I didn’t intend to continue it here. NY, at 10% of gross, or CO, at 75% of disposable, are, in my opinion, about a draconian at it gets, and I don’t have time for “what if”.

Again, Good Luck

 

[Zigner]

A long time-out.

I reluctantly broke a self-imposed sabbatical from FA to address the question of one OP regarding a procedural matter unique to one court system, in one county, in one state and was prepared to leave happily thereafter.

Your issue was a fluke, and how you handle it is ultimately your concern. I simply wanted to assure you that what Sacramento was suggesting was feasible, and I knew because I had successfully counseled it too. I had no intention of discussing State vs. Federal garnishment, nor do I think it’s relevant or ever likely to become a legitimate consideration for the Court. If somebody had said before that the purpose was merely to clarify that neither California nor Federal garnishment would exceed 25%, s/he would have gotten no argument – move on.

To justify the fuzzy reasoning that would lead to beating that subject to death out of context by a hypothetical 90% state law is too ludicrous to postulate. I’d destroy my argument, offend the bench officer, get myself laughed out of court and deserve it. So I didn’t intend to continue it here. NY, at 10% of gross, or CO, at 75% of disposable, are, in my opinion, about a draconian at it gets, and I don’t have time for “what if”.

Again, Good Luck

The only one causing friction on this thread is you Chien Everyone else is trying to be helpful.

 

[You Are Guilty]

The only one causing friction on this thread is you Chien Everyone else is trying to be helpful.

Good grief. I never do this, but WHAT? Chien (and his former? officemate), when they deemed it worthy to post, have been some of the most consistently useful people to have around on consumer debt issues.

To accuse him of not trying to be helpful because you disagree with something he said strikes me as a tad bit out of line, and probably the reason why he doesn't post much anymore. (A feeling I can certainly sympathize with sometimes).

In any event, carry on. I probably shouldn't have opened my yap anyway.

 

[tranquility]

I'm on a referee's mailing list and a long time ago, there was a great schism. Since anyone could join, there were some very senior referees who did professional and international games on the list as well as those who just got their patch and who were doing little Bitsy's and Mitsy's games. While all could have valuable input on every topic, there were times when the VSR's would just have to say how Things Were Done because the topic discussed went far afield from the impetus.

Yet, the circles of futility would continue.

Finally, the VSR's got tired of the folderal and started another list--one of invitation only. Sure, they would check back from time to time, but it wasn't ever quite the same. Pity.

 

[Zigner]

Good grief. I never do this, but WHAT? Chien (and his former? officemate), when they deemed it worthy to post, have been some of the most consistently useful people to have around on consumer debt issues.

To accuse him of not trying to be helpful because you disagree with something he said strikes me as a tad bit out of line, and probably the reason why he doesn't post much anymore. (A feeling I can certainly sympathize with sometimes).

In any event, carry on. I probably shouldn't have opened my yap anyway.

I apologize - I wasn't trying to imply that Chien WASN'T being useful. He was, definitely. I just felt that his attack on other posters (yes, myself included) was unwarranted. I was simply trying to clarify a point.