DEBT DEFENDERS
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Resources

Information Section

This section provides resources to help you understand your rights & legal options and answer common questions. Our goal is to empower you with the knowledge and resources you need to make informed decisions and stay protected.

 

Often collection agencies are intimidating and expect people to lack the knowledge to protect themselves. Also review our Affiliations page, you’ll find additional resources.

 

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Resources

Information Section

This section provides resources to help you understand your rights & legal options and answer common questions. Our goal is to empower you with the knowledge and resources you need to make informed decisions and stay protected.

 

Often collection agencies are intimidating and expect people to lack the knowledge to protect themselves. Also review our Affiliations page, you’ll find additional resources.

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Information
Helpful Advice & Insights
Below you will find six sections that help you understand the issues. We have also saved them as pdfs and you are able to download each topic.

  • Bank Account Levies: What happens when you find that your bank account has been frozen and what can you do about it?
  • Collection Lawsuit Defense: What are the fourteen things you need to know about defending yourself?
  • Common Defenses to Creditor Lawsuits: What important terms do you need to know if a Creditor files a lawsuit?
  • Basics of Defending Creditor Lawsuits: You’ve been sued – what do you need to know?
  • Vacating a Default Judgment: You find out you’ve lost the case – what do you do next?
  • Wage Garnishments: What is a wage garnishment and is there anything I can do about it?

Please give us a call, we are happy to answer all your questions.
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BANK ACCOUNT LEVIES

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A frozen bank account is a bank account that you cannot access because a creditor has placed a levy on it. When your bank account is frozen, you can put money into it, but you can’t take money out.

A frozen bank account is a sure sign that a creditor or debt collector has obtained a court judgment against you (or your joint account holder, if you have a joint bank account). A creditor or debt collector cannot freeze your bank account unless it has a judgment. Judgment creditors freeze people’s bank accounts as a way of pressuring people to make payments.

No. Unfortunately, the law provides that when the bank receives a levy notice, it must freeze your account immediately, before notifying you. That is why most people discover that their account is frozen when they try to use their ATM cards and they suddenly do not work.

No. A judgment creditor does not have to give you specific notice before freezing your bank account. However, a creditor or debt collector is required to notify you (1) that it has filed a lawsuit against you; and (2) that it has obtained a judgment against you. If your first notice of the court case is a frozen bank account, you have not received proper notice under the law.

No. However, a lawyer is more likely to successfully obtained release of your bank accounts. You will need to act quickly as you only have 10 days after your bank account is frozen to file a claim of exemption.

The best way to unfreeze your bank account is to erase the judgment against you. This is called “vacating” the judgment. Once the judgment is vacated, your account will be released automatically. A creditor or debt collector has no right to freeze your account without a judgment. For additional information, see Vacating a Default Judgment.

If your bank account contains exempt benefits such as Social Security, you do not need to negotiate a settlement in order the lift the lien. See below for more information.

If your bank account contains recent wages or nonexempt funds, it is probably in your best interest to get the judgment vacated. Most of our clients find that they can negotiate a much better deal in court than they can outside of court. For this reason, we strongly recommend that you go to court and vacate the default judgment, if at all possible. There are many good reasons to try to vacate the judgment. In California, unpaid judgments are collectible for up to 10 years. Having an unpaid judgment exposes you to repeated efforts to freeze your bank account and/or garnish your wages. Judgments also appear on your credit report, where they affect your ability to get loans, employment, and housing. In most cases, you need to have the judgment vacated in order to clear it from your credit report. Therefore, for your own protection, you are almost always better off getting the judgment vacated instead of settling outside of court.

If all the funds in your bank account are exempt from debt collection, a judgment creditor has no right to hold onto the account, and must release it immediately, even if it has a judgment against you. To obtain release of your account, you need to call the judgment creditor’s attorney (you can get the attorney’s contact information from your bank). Notify the attorney that all the funds in your bank account are exempt from debt collection and demand an immediate release of your account. The attorney may ask you to fax or mail proof of your exempt income. You can send up to three months of bank statements as proof (feel free to redact your bank statements to protect your privacy – the attorney only needs to see deposits, not purchases). Please be aware that the judgment creditor’s attorney may delay and make excuses to avoid releasing your exempt funds. If you have any trouble at all, you should follow our instructions to vacate the default judgment. In general, even when you have exempt funds, you are better off vacating the judgment if at all possible. In any event, you must file a Claim of Exemption within 10 day of the bank levy to preserve your rights.

This situation is also known as having “comingled funds.” In this scenario, your exempt funds are still exempt from collection, even though they are mixed with other, non-exempt funds. However, even though your funds are still exempt, it is often difficult to persuade a debt collector to release your account. Rather than argue with the debt collector on the phone, we advise you to go to court and vacate the default judgment as soon as possible in order to obtain the fastest release of your account.

Yes. A creditor or debt collector can obtain a court order directing the Sheriff to levy funds from your account.

There is no set time limit. Some judgment creditors try to seize funds right away, and others never actually take funds at all. Most judgment creditors will wait at least a few weeks before attempting to levy your bank account.

Yes. You should go to court and try to vacate the default judgment. As part of this process, you can ask the court to order the creditor or debt collector to return your funds.

The first step is to determine why the joint bank account is frozen. Usually, there is a judgment against one, but not both, joint account holders. Telephone the attorney for the judgment creditor and ask for information about the case, including the court, the case number, and the name of the defendant(s).

If there is a judgment against you, you can obtain release of the account by following the steps to vacate the default judgment. If the account contains only exempt income (for example, your mother’s pension or your child’s SSI), you should also telephone the attorney to obtain release of the exempt funds, as described above.

If your account is frozen because of a judgment against someone else, it is best for the other person to vacate the default judgment, if at all possible. If this proves to be impossible, you also have the right to file court papers to obtain release of your account. In any event, you must file a Claim of Exemption within 10 day of the bank levy to preserve your rights.

COLLECTON LAWSUIT DEFENSE

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

95% of credit card collection lawsuits result in a judgment against the debtor because most debtors do not challenge the case!  Many debtors fail to file an Answer or appear in court, with a default judgment entered against them.  Most debtors don’t know that credit card collection lawsuit attorneys do not have admissible evidence that you owe the debt to the debt collector.  An experienced lawyer knows what questions to ask and what documents to request to assist in the defense of your case.  Our experienced credit card defense lawyers can help you win your case by objecting to the improper use of hearsay evidence against you, demanding a chain of ownership that establishes whether the debt collector owns the right to sue on the debt and assist you in determining whether the debt is time-barred against collection by a statute of limitations.

COMMON DEFENSES TO CREDITOR LAWSUITS​​

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

95% of credit card collection lawsuits result in a judgment against the debtor because most debtors do not challenge the case! Many debtors fail to file an Answer or appear in court, with a default judgment entered against them. Most debtors don’t know that credit card collection lawsuit attorneys do not have admissible evidence that you owe the debt to the debt collector. An experienced lawyer knows what questions to ask and what documents to request to assist in defense of your case. Our experienced credit card defense lawyers can help you win your case by objecting to the improper use of hearsay evidence against you, demanding a chain of ownership that establishes whether the debt collector owns the right to sue on the debt and assist you in determining whether the debt is time-barred against collection by a statute of limitations.

The reason that you fell behind on your bills.
The reason that you cannot pay the debt today.
The fact that the creditor or debt collector refused to make reasonable payment arrangements in the past.
A statement that you want to settle the case or make a payment agreement.

To alert the court to your defenses, you should list them briefly in your Answer. You can download an Answer form online here, get one at the Self Service Center (Santa Clara County), or contact one of our sponsoring attorneys for assistance preparing your Answer.

A statute of limitations is a time limit that a creditor has to file a lawsuit against you. It runs from approximately the last time you made a payment. In California, the statute of limitations on a credit card debt is four years (California Code of Civil Procedure § 337), and the statute of limitations on an auto loan or store card (like a Sears or Macy’s card) is four years (California Commercial Code § 2725). If it has been more than four years since you paid your credit card debt or car payment, the statute of limitations on that debt has expired. The statute of limitations is an absolute defense — the court must dismiss a case if the debt is past the statute of limitations. However, you will have the burden of proof for the defense. Any payment, no matter how small, can reset the statute of limitations. To be safe, NEVER make a payment if you want to assert the statute of limitations as a defense. If you believe that the you were sued on a debt after the statute of limitations expired, contact one of our sponsoring attorneys to review your case without cost or obligation.

This defense may apply if you are being sued for an auto loan or other consumer loan that you cosigned for someone else. The defense only applies if you cosigned a loan for someone else, who is not your spouse, and you did not receive any of the money, property, or services which were the subject of, or purchased with, the loan proceeds. The defense may apply no matter how you are designated on the loan documents (i.e. buyer, co-buyer, borrower, co-borrower, etc.). The key fact for this defense, on which you will have the burden of proof, is that you did not directly benefit from the loan proceeds. This is a very strong defense. If you are being sued on debt that you cosigned for someone other than your spouse and you believe that you were not provided a cosigner notice, contact one of our sponsoring attorneys to review your case without cost or obligation.

If you believe that the amount of the debt is incorrect, you have the right to dispute it. Remember that the plaintiff has the burden to prove that you owe the amount for which you have been sued. The plaintiff must prove that the principal, interest, collection costs, and attorneys fees are all correct, agreed to in your contract, and lawfully charged. You always have the right to insist that the plaintiff come up with your original contract, account statements, and in some cases even purchase receipts, to prove the amount of the debt.

If you previously declared bankruptcy, and the debt for which you are being sued was discharged as part of that bankruptcy proceeding, the debt is no longer legally collectible from you. Bankruptcy is an absolute defense to a debt collection lawsuit.

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless the auto dealer where you purchased the vehicle accurately made all the required credit disclosures. Because auto dealers rarely, if ever, accurately make all of the required credit disclosures, this is a very strong defense that should be investigated in every auto deficiency case. If you are being sued for an auto loan deficiency and the auto dealer where you purchased the vehicle arranged the financing for you, contact one of our sponsoring attorneys to review your case without cost or obligation.

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless you were sent a notice of the lender’s intent to sell the vehicle. The Notice of Intent must contain several required disclosures — more than a dozen in all. Among the required disclosures, the lender must disclose your right to reinstate the agreement upon the payment of the loan delinquency and repossession costs. In order to satisfy this required disclosure, the lender must separately disclose all additional amounts that may become due under the loan agreement during the 15 day reinstatement period. Many lenders fail to make these additional disclosures. In order to prove this defense you will need a copy of the Notice of Intent that was sent to you shortly after your vehicle was repossessed. This is a strong defense that should be investigated in every auto deficiency case. If you are being sued for an auto loan deficiency and you have a copy of the contract and Notice of Intent from the lender, contact one of our sponsoring attorneys to review your case without cost or obligation.

BASICS OF DEFENDING CREDITOR LAWSUITS​

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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Yes. In fact, it is quite common for creditors and debt buyers to file lawsuits to collect debts. In California, creditors and debt buyers of consumer debts must file the lawsuit in the county where you obtained the debt they are suing on, in the county where you lived at the time you obtained the debt or in the county where you live at the time the lawsuit is filed. It is unlawful for creditors or debt buyers to file a lawsuit against a consumer in any other county.

A “debt buyer” is a company that specializes in buying and collecting old debts. If you fail to repay a debt, your creditor might sell it to a debt buyer. The debt buyer will then try to collect the debt from you. This practice is legal. Debts are often bought and sold more than once.

Yes. If your creditor has sold your debt to a debt buyer, the debt buyer can sue you to collect the debt. This practice is legal.

Yes. Every defendant in a debt collection lawsuit should be represented by a lawyer. However, most low income Californians who have been sued over a debt will be unable to obtain free or reduced fee legal representation. Some private attorneys can cost almost as much, if not more than, the debt itself. Unfortunately, most low income Californians falsely believe that they have no choice but to represent themselves in court. Most people who have been sued are unaware that experienced consumer attorneys often take collection defense cases with very strong defenses on a contingency fee basis. In other cases, attorneys will represent low income consumers in collection defense cases for a reduced fee. Monthly payment plans are also common.

You should not ignore a debt collection lawsuit because you initially think that you cannot cannot find or afford a lawyer. Hundreds of low income Californians defend themselves in debt collection cases every single day, and most do so unsuccessfully. Even though a debt collection case is relatively simple and straightforward as compared to other kinds of legal problems, debt collection attorneys often rely on the fact that unrepresented defendants do not know their rights. You can fight back by educating yourself about your case! Read the information in these pages to familiarize yourself with the court process and the issues you will face as a defendant. If possible, you should contact one of our sponsoring attorneys to obtain individualized advice about potential defenses you may have. In our experience, a little information goes an incredibly long way.

A plaintiff is the party who files the lawsuit. If a creditor or debt buyer files a lawsuit against you, the creditor or debt buyer is the plaintiff.

A defendant is the party who is sued by the plaintiff. If a creditor or debt buyer files a lawsuit against you, you are the defendant.

A Summons is your official notification that you have been sued. It tells you how and where to file your written response in order to defend the case. A Summons is usually accompanied by a Complaint.

A Complaint explains why you have been sued. It contains the facts and the legal claims that are the basis for the lawsuit. In debt collection cases, the Complaint is often very short and may provide very little information.

An Answer is an official written response to a Complaint. In your Answer, you must write all the defenses that you want to raise in the case.

A Cross-Complaint is a claim that you have against the plaintiff. The plaintiff may owe you money, or the plaintiff may have violated your rights or caused you some other kind of harm for which you want to recover money damages. You always have the right to file a Cross-Complaint against the plaintiff along with your Answer.

DO NOT IGNORE IT. You should always respond to a Summons and Complaint. The correct way to respond is to file an Answer in the clerk’s office at the address provided on the Summons. The clerk will not give you an Answer form and cannot help you to complete an Answer. For more detailed assistance filing your Answer, contact one of our sponsoring attorneys to obtain individualized advice about your case.

Yes. If you were served with the Summons and Complaint in person, you must file your Answer within 30 DAYS. “In person” means that a process server came to your home or place of business and gave the papers to you personally. If you were served with the Summons and Complaint in some other way, you have 40 DAYS to file your Answer.

What if the time for filing my Answer has already expired?

You should try to file an Answer anyway. As long as there is no default entered against you, the court will usually accept a late Answer.

Your Answer should contain all the defenses that you want to raise in your case. For more information, see Common Defenses to Creditor Lawsuits or contact one of our sponsoring attorneys to obtain individualized advice about your case.

If you are rushed for time and do not know what to do, you can use a California Judicial Council form Answer and mark the box for “general denial.” You can always amend your Answer later. However, please note that if you want to raise a defense of improper service, you MUST do so in your initial Answer, or you will not be able to do so at all.

If you ignore the Summons, the plaintiff will almost certainly ask the court to award a judgment against you. This kind of judgment is called a “default judgment.” A default judgment usually awards the plaintiff everything that it asked for in the Complaint, plus interest and court costs. The judgment will accumulate interest at the rate of 10% per year and is enforceable for ten years if not satisfied. The judgment also gives the plaintiff the right to try to collect money from you by freezing your bank account or garnishing your wages. You can avoid a default judgment by filing an Answer and appearing in court.

After you file an Answer, the court will notify you of your first court date. Your first court date could be anywhere from 1 month to 9 months after you file your Answer, depending on where you live. It is very important that you attend this court date. If you fail to attend the court date, the court will award a default judgment against you.

The “burden of proof” is the responsibility to provide evidence in support of a legal claim.

The plaintiff — the creditor or debt buyer — ALWAYS has the burden of proof in a debt collection case. This means that the plaintiff has to come up with evidence to prove to the court that (1) the plaintiff has the right to sue you; (2) the debt is yours; and (3) you owe the exact amount of money that the plaintiff claims you owe. You do not have to prove that you do not owe the money. Rather, the plaintiff has to prove that you DO owe the money.

As a defendant in a court case, you always have the right to “put the plaintiff to its proof.” That means that you can insist that the plaintiff come up with actual evidence to prove that you owe a debt. Although you should always be truthful in court, you do not have to admit that the plaintiff’s allegations are correct.

If you admit that the plaintiff’s allegations are correct, the plaintiff can rely on your admission to win the case. But if you challenge the plaintiff’s right to sue you, the existence of the debt, or the amount of the debt, the plaintiff must provide the following evidence to the court:

Proof that the plaintiff has the right to sue you. In the case of a debt buyer, the debt buyer must prove that it owns your debt by showing the court the contract of sale. This contract is called an “assignment.” The assignment must mention your debt specifically. If your debt has been bought and sold multiple times, the debt buyer must present a chain of assignments that goes all the way back to your original creditor.
Proof that the debt is yours. Usually, this means an original contract with your signature.
Proof that the amount demanded in the lawsuit is correct. Usually, this means a complete set of bills or account statements. In the case of a credit card, the plaintiff also has to prove that each and every charge on the card was authorized.
All of this proof must come in a specific format, or else it is considered “hearsay,” not admissible in court. If the plaintiff fails to meet its burden of proof by coming up with admissible evidence of your debt, the court must dismiss the case.

The plaintiff has to present quite a lot of evidence in order to meet its burden of proof. This evidence is often difficult or expensive for the plaintiff to produce. If your debt is old, or if it has been bought and sold multiple times, evidence of your debt may not exist at all. It is almost always much easier and cheaper for the plaintiff to dismiss the case than to come up with all the evidence needed to meet the burden of proof. That is why the plaintiff will nearly always want you to agree to a settlement.

KNOW YOUR RIGHTS!
If you believe you do not owe the debt, never agree to a settlement. Insist on your defenses and put the plaintiff to its proof. If you have a solid defense, you have a good chance of winning the case.

If you would like to negotiate a settlement, use your knowledge of the burden of proof to make sure you get a settlement that works for you.

If you cannot afford to make a settlement agreement, or if your income is exempt from debt collection, you should put the plaintiff to its proof. There is a good chance that the plaintiff will be unable to meet its burden, and the case will eventually be dismissed.

Remember: If you do not appear in court, you will automatically lose. Showing up is often more than half the battle!

VACATING A DEFAULT JUDGEMENT

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A judgment is the court’s written, final decision in the case. If the judgment is against you, it will state how much money you owe to the plaintiff.

A “judgment creditor” is a creditor or debt buyer that has obtained a judgment against a defendant.

When a defendant fails to file a written Answer with the court (“defaults”) the court will issue a judgment against the defendant. A judgment issued under those circumstances is commonly known as a “default judgment.” The court usually awards the plaintiff the amount demanded in the complaint, plus interest and court costs. The court usually awards attorneys’ fees on a default judgment based of a schedule published by the court.

Yes. Under certain circumstances, it is possible to vacate (re-open) a default judgment. The court has a special procedure for determining whether to vacate a default judgment. The procedure is relatively straightforward, but often requires a noticed motion and a hearing before the judge.

What are the criteria for vacating a default judgment?

There are two main reasons that a court will vacate a default judgment: (1) excusable default and (2) lack of personal jurisdiction. These reasons are explained below.

Excusable default is the most common reason for vacating a default judgment. It has two parts: (1) a reasonable excuse for not filing an Answer within the 30 day time; and (2) a meritorious defense (a good defense). There is a time limit for moving to vacate a judgment because of excusable default — 180 days from the entry of the Judgment. (If you were never served with a Notice of Entry of the Judgment, the time limit is extended to 2 years.)

Common examples of a reasonable excuse: The most common example of a reasonable excuse is that you did not receive the Summons. Other reasonable excuses are that at the time you received the Summons you were out of town, ill, incarcerated, or that you could not answer the Summons for some other good reason. You would also have a reasonable excuse if, in response to the Summons, you telephoned the attorneys for the plaintiff and they told you not to bother filing an Answer.

Sometimes people do not respond to the Summons because they do not understand what it is. This is not normally considered to be a reasonable excuse; however, some judges will accept it.

Common examples of a meritorious defense: A defense is a reason why you don’t owe the money, not a reason why you can’t pay. For example, you would like to use the defense of identity theft or statute of limitations. For a list of possible defenses, see Common Defenses to Debt Collection Lawsuits. You can also simply dispute the amount of the debt. Disputing the amount of the debt, combined with improper service, is a sufficient (and very common) reason for the court to grant an order vacating the default judgment.

The court can also vacate a default judgment if you were not properly served with a Summons. There are advantages and disadvantages to trying to vacate a judgment on the grounds of improper service. The main advantage is that there is no time limit for seeking to vacate a judgment on the grounds of lack of jurisdiction. Also, if you seek to vacate a judgment because of improper service, you do not need to cite a meritorious defense (or any defense). The disadvantage of seeking to vacate a judgment on the grounds of improper service is that you have the burden of proving the bad service, which you must do at a hearing before the judge. Proving improper service can be difficult depending on the facts of your case.

First, find out which court issued the judgment. (In a debt collection case, you will most likely need to go to the Civil Division of the Superior Court in the county where you live.) Next, go to the court that issued the judgment and find the civil court clerk’s office. There, tell the clerk that you want a copy of the entire court file for your case. The clerk may give you a pre-printed document request form to fill out. Once you have obtained a complete copy of the court file for your case, contact one of our sponsoring attorneys to review your case without cost or obligation.

At the court hearing, you will most likely find yourself sitting in a courtroom with a number of other people who are in the same position as you. The court clerk will call out your name, and you should answer clearly. The attorney for the plaintiff may call out your name as well. The plaintiff’s attorney might consent to vacating the judgment or ask whether you want to make a settlement agreement. No matter what the plaintiff’s attorney says to you, it is important that you focus on making sure that the default judgment is vacated. If the plaintiff’s attorney does not consent to vacating the judgment, you should ask to go before the judge. When you are before the judge, you must focus on the arguments you made in your Motion to Vacate. Simply keep repeating (1) your good reason for failing to file an Answer; and (2) your defense in the case. As long as you have a reasonable excuse and a meritorious defense, the judge should grant the Motion to Vacate and vacate the judgment against you. If you want to argue lack of jurisdiction because you were not served with a Summons, you must do it at this time.

Once the default judgment is vacated, the plaintiff must release your bank account and cancel the wage garnishment. This is included in the court’s order vacating the judgment.

Probably not. In most cases, even though the judgment is vacated, you still have to defend the case. That means you have to file an Answer and attend at least one additional court date.

WAGE GARNISHMENTS

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A wage garnishment occurs when a court or the government orders your employer to set aside some of your earnings to pay a debt.

The amount of your wages that can be garnished for a private debt varies according to your income. Private debts include credit cards, medical bills, bank loans, and private student loans. Private debts do not include child support, taxes, or government student loans. As of July 24, 2009, the amount of wages that are exempt from garnishment is as follows.

If your disposable income is less than $217.50 per week:

All of your earned income is exempt from debt collection. Your wages CANNOT be garnished.

If your disposable income is between $217.51 and $290.00 per week:

The creditor may garnish whatever you earn above $217.50 per week.

If your disposable income is greater than $290.01 per week:

The creditor may garnish 25% of your disposable income.

If you are already being garnished for child support or spousal support:

You can still be garnished to pay a private debt, but only up to 25% of your disposable income.

Your “disposable income” is the amount of money you take home after deductions for state and federal income taxes, federal Social Security, state disability insurance and public employee retirement systems.

Your gross income is the amount you earn before any deductions are made.

No. Social Security and other benefits are completely exempt from debt collection and cannot be garnished to pay a private debt.

All wage garnishments for private debts begin with a debt collection lawsuit.
The creditor must obtain a judgment against you in order to garnish your wages. In California, the vast majority of judgments against consumers are obtained by default.
Armed with a judgment, the creditor will obtain a wage garnishment order from the court clerk. This order is called a “Earnings Withholding Order.”
Within 10 days of receiving the Earnings Withholding Order, your employer must give you a copy of the order and a copy of the Employee Instructions.
Once you are served with Earnings Withholding Order and Employee Instructions, you can ask for an exemption by completing a Claim for Exemption form and a Financial Statement. Once completed, you must mail or deliver two (2) copies to the levying officer (in most cases the County Sheriff).

If you receive a wage garnishment notice, you can be sure that a creditor has obtained a judgment against you. Therefore, you should consider whether you have grounds to cancel or vacate the judgment. If you can vacate the judgment, the creditor will no longer have the ability to garnish your wages, nor can the judgment appear on your credit report. In order to vacate the judgment you will have to file court papers and appear in court at least once, and possibly more than once. For most people, it is worth it to take the time and effort to vacate the judgment. For additional information, see Vacating a Default Judgment.

Even if your wages are already being garnished to pay a private debt, you may have the right to vacate the judgment and stop the garnishment, especially if you were never properly notified of the lawsuit. If the judgment is vacated, not only will the garnishment stop, but the court can order the creditor to return to you all the money that it took to pay the debt.

Even if you choose not to try to vacate the judgment, you always have the right to go to court and ask the court to modify the amount of your garnishment. To do this, you need to complete a Claim for Exemption form and a Financial Statement. Once completed, you must mail or deliver two (2) copies to the levying officer (in most cases the County Sheriff). You should also consider discussing your options with an attorney. You can also contact one of our sponsoring attorneys to obtain individualized advice about your case.

Usually not. If you are already being garnished at the maximum amount, then the rest of your wages are exempt from debt collection, even if they are deposited in a bank account.

Yes, but only up to the maximum amounts specified above. Usually, what happens with multiple garnishments is that the first creditor takes the maximum amount possible. The second creditor must wait until you finish paying the first creditor. Only then can the second creditor garnish your wages.

No. Your employer cannot fire you if your wages are garnished.

BANK ACCOUNT LEVIES

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A frozen bank account is a bank account that you cannot access because a creditor has placed a levy on it. When your bank account is frozen, you can put money into it, but you can’t take money out.

A frozen bank account is a sure sign that a creditor or debt collector has obtained a court judgment against you (or your joint account holder, if you have a joint bank account). A creditor or debt collector cannot freeze your bank account unless it has a judgment. Judgment creditors freeze people’s bank accounts as a way of pressuring people to make payments.

No. Unfortunately, the law provides that when the bank receives a levy notice, it must freeze your account immediately, before notifying you. That is why most people discover that their account is frozen when they try to use their ATM cards and they suddenly do not work.

No. A judgment creditor does not have to give you specific notice before freezing your bank account. However, a creditor or debt collector is required to notify you (1) that it has filed a lawsuit against you; and (2) that it has obtained a judgment against you. If your first notice of the court case is a frozen bank account, you have not received proper notice under the law.

No. However, a lawyer is more likely to successfully obtained release of your bank accounts. You will need to act quickly as you only have 10 days after your bank account is frozen to file a claim of exemption.

The best way to unfreeze your bank account is to erase the judgment against you. This is called “vacating” the judgment. Once the judgment is vacated, your account will be released automatically. A creditor or debt collector has no right to freeze your account without a judgment. For additional information, see Vacating a Default Judgment.

If your bank account contains exempt benefits such as Social Security, you do not need to negotiate a settlement in order the lift the lien. See below for more information.

If your bank account contains recent wages or nonexempt funds, it is probably in your best interest to get the judgment vacated. Most of our clients find that they can negotiate a much better deal in court than they can outside of court. For this reason, we strongly recommend that you go to court and vacate the default judgment, if at all possible. There are many good reasons to try to vacate the judgment. In California, unpaid judgments are collectible for up to 10 years. Having an unpaid judgment exposes you to repeated efforts to freeze your bank account and/or garnish your wages. Judgments also appear on your credit report, where they affect your ability to get loans, employment, and housing. In most cases, you need to have the judgment vacated in order to clear it from your credit report. Therefore, for your own protection, you are almost always better off getting the judgment vacated instead of settling outside of court.

If all the funds in your bank account are exempt from debt collection, a judgment creditor has no right to hold onto the account, and must release it immediately, even if it has a judgment against you. To obtain release of your account, you need to call the judgment creditor’s attorney (you can get the attorney’s contact information from your bank). Notify the attorney that all the funds in your bank account are exempt from debt collection and demand an immediate release of your account. The attorney may ask you to fax or mail proof of your exempt income. You can send up to three months of bank statements as proof (feel free to redact your bank statements to protect your privacy – the attorney only needs to see deposits, not purchases). Please be aware that the judgment creditor’s attorney may delay and make excuses to avoid releasing your exempt funds. If you have any trouble at all, you should follow our instructions to vacate the default judgment. In general, even when you have exempt funds, you are better off vacating the judgment if at all possible. In any event, you must file a Claim of Exemption within 10 day of the bank levy to preserve your rights.

This situation is also known as having “comingled funds.” In this scenario, your exempt funds are still exempt from collection, even though they are mixed with other, non-exempt funds. However, even though your funds are still exempt, it is often difficult to persuade a debt collector to release your account. Rather than argue with the debt collector on the phone, we advise you to go to court and vacate the default judgment as soon as possible in order to obtain the fastest release of your account.

Yes. A creditor or debt collector can obtain a court order directing the Sheriff to levy funds from your account.

There is no set time limit. Some judgment creditors try to seize funds right away, and others never actually take funds at all. Most judgment creditors will wait at least a few weeks before attempting to levy your bank account.

Yes. You should go to court and try to vacate the default judgment. As part of this process, you can ask the court to order the creditor or debt collector to return your funds.

The first step is to determine why the joint bank account is frozen. Usually, there is a judgment against one, but not both, joint account holders. Telephone the attorney for the judgment creditor and ask for information about the case, including the court, the case number, and the name of the defendant(s).

If there is a judgment against you, you can obtain release of the account by following the steps to vacate the default judgment. If the account contains only exempt income (for example, your mother’s pension or your child’s SSI), you should also telephone the attorney to obtain release of the exempt funds, as described above.

If your account is frozen because of a judgment against someone else, it is best for the other person to vacate the default judgment, if at all possible. If this proves to be impossible, you also have the right to file court papers to obtain release of your account. In any event, you must file a Claim of Exemption within 10 day of the bank levy to preserve your rights.

COLLECTION LAWSUIT DEFENSE

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

95% of credit card collection lawsuits result in judgment against the debtor because most debtors do not challenge the case! Many debtors fail to file an Answer or appear in court and have a default judgment entered against them. Most debtors don’t know that credit card collection lawsuit attorneys do not have admissible evidence that you owe the debt to the debt collector. An experienced lawyer knows what questions to ask and what documents to request to assist the defense of your case.

Our experienced credit card defense lawyers can help you win your case by objecting to the improper use of hearsay evidence against you, demanding a chain of ownership that establishes whether the debt collector owns the right to sue on the debt and assist you in determining whether the debt is time barred against collection by a statute of limitations.

COMMON DEFENSES TO CREDITOR LAWSUITS​

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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Generally, a defense is a reason why the plaintiff should not win its case. In a debt collection lawsuit, a defense is a reason why (1) the plaintiff failed to prove its case or (2) you do not owe the money. If one of your defenses is successful, the plaintiff will lose and you will win.

The reason that you fell behind on your bills.
The reason that you cannot pay the debt today.
The fact that the creditor or debt collector refused to make reasonable payment arrangements in the past.
A statement that you want to settle the case or make a payment agreement.

Yes. One or more of the common defenses discussed below probably applies to your case. Each of the defenses discussed below — if it applies to your case — is a reason why the plaintiff should lose and you should win. If you have questions about whether a particular defense might apply to your case, contact one of our sponsoring attorneys to obtain individualized advice about your case.

To alert the court to your defenses, you should list them briefly in your Answer. You can download an Answer form online here, get one at the Self Service Center (Santa Clara County), or contact one of our sponsoring attorneys for assistance preparing your Answer.

These defenses apply when you believe that the debt for which you are being sued is not your debt. Identity theft occurs when somebody steals your name and personal information and opens up credit accounts in your name. Mistaken identity occurs when you have been confused with somebody else who has a similar name or other identifying information. Remember that the burden of proof is on the plaintiff to establish that you made or authorized each and every charge. You do not have to prove that the debt is not yours. NEVER agree to a settlement if you are a victim of identity theft or mistaken identity. This is a very strong defense. If you believe that you may be a victim of identity theft or mistaken identity, contact one of our sponsoring attorneys to review your case without cost or obligation.

A statute of limitations is a time limit that a creditor has to file a lawsuit against you. It runs from approximately the last time you made a payment. In California, the statute of limitations on a credit card debt is four years (California Code of Civil Procedure § 337), and the statute of limitations on an auto loan or store card (like a Sears or Macy’s card) is four years (California Commercial Code § 2725). If it has been more than four years since you paid your credit card debt or car payment, the statute of limitations on that debt has expired. The statute of limitations is an absolute defense — the court must dismiss a case if the debt is past the statute of limitations. However, you will have the burden of proof for the defense. Any payment, no matter how small, can reset the statute of limitations. To be safe, NEVER make a payment if you want to assert the statute of limitations as a defense. If you believe that the you were sued on a debt after the statute of limitations expired, contact one of our sponsoring attorneys to review your case without cost or obligation.

This defense may apply if you are being sued for a credit card that you shared with someone else. The defense hinges on the difference between a cosigner and an authorized user. If another person gave you permission to use his or her card, and you never agreed to be responsible for paying for that card, you were an authorized user. As an authorized user, you cannot be held responsible for that credit card debt. However, if you signed a credit card agreement in which you agreed to be jointly responsible with someone else for a credit card, you are a cosigner, and this defense does not apply to you. As a cosigner, you can be held responsible for the debt, even if none of the charges were yours.

This defense may apply if you are being sued for an auto loan or other consumer loan that you cosigned for someone else. The defense only applies if you cosigned a loan for someone else, who is not your spouse, and you did not receive any of the money, property, or services which were the subject of, or purchased with, the loan proceeds. The defense may apply no matter how you are designated on the loan documents (i.e. buyer, co-buyer, borrower, co-borrower, etc.). The key fact for this defense, on which you will have the burden of proof, is that you did not directly benefit from the loan proceeds. This is a very strong defense. If you are being sued on debt that you cosigned for someone other than your spouse and you believe that you were not provided a cosigner notice, contact one of our sponsoring attorneys to review your case without cost or obligation.

If you have paid all or a part of the debt, and you believe you have not been credited for the payment, you can raise the defense of payment. You will have the burden of proof that you paid all or part of the debt.

If you believe that the amount of the debt is incorrect, you have the right to dispute it. Remember that the plaintiff has the burden to prove that you owe the amount for which you have been sued. The plaintiff must prove that the principal, interest, collection costs, and attorneys fees are all correct, agreed to in your contract, and lawfully charged. You always have the right to insist that the plaintiff come up with your original contract, account statements, and in some cases even purchase receipts, to prove the amount of the debt.

This is a defense that applies when the plaintiff is a debt buyer, not your original creditor. Because you never signed a contract directly with the debt buyer, you have the right to challenge the debt buyer’s right to sue you (also known as “standing”). The plaintiff will not be able to prevail unless it can prove to the court that it owns your debt. To do this, the debt buyer will have to produce a contract of sale (also known as an “assignment”) that mentions your debt specifically. If the debt buyer bought your debt from another debt buyer, it has to provide a chain of assignments going all the way back to the original creditor. If the debt buyer cannot or will not provide these documents, the court must dismiss the case.

If you previously declared bankruptcy, and the debt for which you are being sued was discharged as part of that bankruptcy proceeding, the debt is no longer legally collectible from you. Bankruptcy is an absolute defense to a debt collection lawsuit.

This is a special defense that applies if you negotiated the agreement sued on in one of the following languages: Spanish, Chinese, Tagalog, Vietnamese, or Korean. In California, any business that negotiates with consumers either orally or in writing on one of these non-English languages, must provide the consumer a fully completed copy of the contract in that language. Therefore, if you negotiated the purchase of a vehicle with the auto dealer in Spanish, the auto dealer was required to provide you a fully completed copy of the contract in Spanish. Failure to provide a foreign language contract makes the agreement unenforceable. This is a strong defense, but you will have the burden of proof to show that the transaction was negotiated in one of the covered non-English languages. If you are being sued for transaction that was negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean, and you were not provided a fully completed copy of the agreement in that language, contact one of our sponsoring attorneys to review your case without cost or obligation..

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless the auto dealer where you purchased the vehicle accurately made all the required credit disclosures. Because auto dealers rarely, if ever, accurately make all of the required credit disclosures, this is a very strong defense that should be investigated in every auto deficiency case. If you are being sued for an auto loan deficiency and the auto dealer where you purchased the vehicle arranged the financing for you, contact one of our sponsoring attorneys to review your case without cost or obligation.

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless the entire agreement between you and the auto dealer where you purchased the vehicle was contained in one document. In California, this document is usually yellow and nearly three pages in length (printed on both sides). The entire agreement between you and the auto dealer regarding the total cost and payment terms must be contained in this single document. This means that there can be no side agreements, either orally or in writing.

Despite this one document rule, auto dealers often make side agreements regarding the total cost and payment terms when selling vehicles to consumers. One common side agreement concerns the amount and timing of the down-payment. It is quite common for auto dealers to allow the down-payment to be made in installments over a short period of time, ranging from a few days to a month or more. In some cases, the long yellow sales contract states that a large cash down-payment was made on the date of the sale, when in fact there was a side agreement (not contained in the contract) which allowed the down-payment to be made in one or more payments. Auto dealers may also offer to “hold” post-dated checks for the remaining down-payment. Some auto dealers have even used a separate “check hold agreement” for these side agreements. Another less often used method for “assisting” the buyer purchase a vehicle is accomplished by increasing the sales price for the vehicle by the same amount of the requested down-payment, then the auto dealers makes the down-payment for the buyer. When this method is used, the sales contract is made to look like a down-payment was made, when in fact, it was not.

Both of these vehicle sales methods illustrate side agreements which violate the one document rule. While this defense is often difficult to prove, and you will have the burden of proof, this is a very strong defense if it can be proven. If you are being sued for an auto loan and you had one of these side agreements with the auto dealer who arranged the vehicle loan for you, contact one of our sponsoring attorneys to review your case without cost or obligation.

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless you were sent a notice of the lender’s intent to sell the vehicle. The Notice of Intent must contain several required disclosures — more than a dozen in all. Among the required disclosures, the lender must disclose your right to reinstate the agreement upon the payment of the loan delinquency and repossession costs. In order to satisfy this required disclosure, the lender must separately disclose all additional amounts that may become due under the loan agreement during the 15 day reinstatement period. Many lenders fail to make these additional disclosures. In order to prove this defense you will need a copy of the Notice of Intent that was sent to you shortly after your vehicle was repossessed. This is a strong defense that should be investigated in every auto deficiency case. If you are being sued for an auto loan deficiency and you have a copy of the contract and Notice of Intent from the lender, contact one of our sponsoring attorneys to review your case without cost or obligation.

This is a special defense that applies in auto loan cases. When you default on an auto loan, the bank will usually repossess the car and sell it — often for far less than the value of the car. When the proceeds of the sale do not cover the entire auto loan, the bank may sue you for the remainder (called the “deficiency”). However, the lender cannot pursue you for a deficiency unless it obtains a fair price for the car (a fair price is known as a “commercially reasonable price”). The burden of proof is on the bank to establish that it sold the car at a commercially reasonable price.

The defense of improper service applies if (1) you never received the Summons and Complaint at all; or (2) you received the Summons and Complaint too late to file an Answer.

Under California law, a process server must try to make personal service before they use substitute service. Personal service occurs when the process server delivers the Summons and Complaint to you in person. Substitute service occurs when the process server leaves one copy of the Summons at your home (or place of business) with a roommate, relative, or other responsible party (known as a “person of suitable age and discretion”) AND mails a second copy of the Summons to you at your last known address (or place of business).

If a process server makes three unsuccessful attempts at personal service, he or she is allowed to use substitute conspicuous service. California law does not authorize service of the Summons by slipping one copy of the Summons under your door or attaching it to the door.

Here are some common examples of improper service:

Leaving the Summons with your neighbor, who lives in a different apartment.
Sending the Summons to an old address where you no longer live.
Throwing the Summons on the floor in the lobby of your apartment building.
Throwing the Summons in your yard.
Attaching the Summons to your front door.
Sending the Summons to you by mail only.
You cannot get a case dismissed for improper service, but it is grounds for vacating a default if you were unable to file an Answer timely.

BASICS OF DEFENDING CREDITOR LAWSUITS

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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Yes. In fact, it is quite common for creditors and debt buyers to file lawsuits to collect debts. In California, creditors and debt buyers of consumer debts must file the lawsuit in the county where you obtained the debt they are suing on, in the county where you lived at the time you obtained the debt or in the county where you live at the time the lawsuit is filed. It is unlawful for creditors or debt buyers to file a lawsuit against a consumer in any other county.

A “debt buyer” is a company that specializes in buying and collecting old debts. If you fail to repay a debt, your creditor might sell it to a debt buyer. The debt buyer will then try to collect the debt from you. This practice is legal. Debts are often bought and sold more than once.

Yes. If your creditor has sold your debt to a debt buyer, the debt buyer can sue you to collect the debt. This practice is legal.

Yes. Every defendant in a debt collection lawsuit should be represented by a lawyer. However, most low income Californians who have been sued over a debt will be unable to obtain free or reduced fee legal representation. Some private attorneys can cost almost as much, if not more than, the debt itself. Unfortunately, most low income Californians falsely believe that they have no choice but to represent themselves in court. Most people who have been sued are unaware that experienced consumer attorneys often take collection defense cases with very strong defenses on a contingency fee basis. In other cases, attorneys will represent low income consumers in collection defense cases for a reduced fee. Monthly payment plans are also common.

You should not ignore a debt collection lawsuit because you initially think that you cannot cannot find or afford a lawyer. Hundreds of low income Californians defend themselves in debt collection cases every single day, and most do so unsuccessfully. Even though a debt collection case is relatively simple and straightforward as compared to other kinds of legal problems, debt collection attorneys often rely on the fact that unrepresented defendants do not know their rights. You can fight back by educating yourself about your case! Read the information in these pages to familiarize yourself with the court process and the issues you will face as a defendant. If possible, you should contact one of our sponsoring attorneys to obtain individualized advice about potential defenses you may have. In our experience, a little information goes an incredibly long way.

A plaintiff is the party who files the lawsuit. If a creditor or debt buyer files a lawsuit against you, the creditor or debt buyer is the plaintiff.

A defendant is the party who is sued by the plaintiff. If a creditor or debt buyer files a lawsuit against you, you are the defendant.

A Summons is your official notification that you have been sued. It tells you how and where to file your written response in order to defend the case. A Summons is usually accompanied by a Complaint.

A Complaint explains why you have been sued. It contains the facts and the legal claims that are the basis for the lawsuit. In debt collection cases, the Complaint is often very short and may provide very little information.

An Answer is an official written response to a Complaint. In your Answer, you must write all the defenses that you want to raise in the case.

A Cross-Complaint is a claim that you have against the plaintiff. The plaintiff may owe you money, or the plaintiff may have violated your rights or caused you some other kind of harm for which you want to recover money damages. You always have the right to file a Cross-Complaint against the plaintiff along with your Answer.

DO NOT IGNORE IT. You should always respond to a Summons and Complaint. The correct way to respond is to file an Answer in the clerk’s office at the address provided on the Summons. The clerk will not give you an Answer form and cannot help you to complete an Answer. For more detailed assistance filing your Answer, contact one of our sponsoring attorneys to obtain individualized advice about your case.

Yes. If you were served with the Summons and Complaint in person, you must file your Answer within 30 DAYS. “In person” means that a process server came to your home or place of business and gave the papers to you personally. If you were served with the Summons and Complaint in some other way, you have 40 DAYS to file your Answer.

What if the time for filing my Answer has already expired?

You should try to file an Answer anyway. As long as there is no default entered against you, the court will usually accept a late Answer.

Your Answer should contain all the defenses that you want to raise in your case. For more information, see Common Defenses to Creditor Lawsuits or contact one of our sponsoring attorneys to obtain individualized advice about your case.

If you are rushed for time and do not know what to do, you can use a California Judicial Council form Answer and mark the box for “general denial.” You can always amend your Answer later. However, please note that if you want to raise a defense of improper service, you MUST do so in your initial Answer, or you will not be able to do so at all.

If you ignore the Summons, the plaintiff will almost certainly ask the court to award a judgment against you. This kind of judgment is called a “default judgment.” A default judgment usually awards the plaintiff everything that it asked for in the Complaint, plus interest and court costs. The judgment will accumulate interest at the rate of 10% per year and is enforceable for ten years if not satisfied. The judgment also gives the plaintiff the right to try to collect money from you by freezing your bank account or garnishing your wages. You can avoid a default judgment by filing an Answer and appearing in court.

After you file an Answer, the court will notify you of your first court date. Your first court date could be anywhere from 1 month to 9 months after you file your Answer, depending on where you live. It is very important that you attend this court date. If you fail to attend the court date, the court will award a default judgment against you.

The “burden of proof” is the responsibility to provide evidence in support of a legal claim.

The plaintiff — the creditor or debt buyer — ALWAYS has the burden of proof in a debt collection case. This means that the plaintiff has to come up with evidence to prove to the court that (1) the plaintiff has the right to sue you; (2) the debt is yours; and (3) you owe the exact amount of money that the plaintiff claims you owe. You do not have to prove that you do not owe the money. Rather, the plaintiff has to prove that you DO owe the money.

As a defendant in a court case, you always have the right to “put the plaintiff to its proof.” That means that you can insist that the plaintiff come up with actual evidence to prove that you owe a debt. Although you should always be truthful in court, you do not have to admit that the plaintiff’s allegations are correct.

If you admit that the plaintiff’s allegations are correct, the plaintiff can rely on your admission to win the case. But if you challenge the plaintiff’s right to sue you, the existence of the debt, or the amount of the debt, the plaintiff must provide the following evidence to the court:

Proof that the plaintiff has the right to sue you. In the case of a debt buyer, the debt buyer must prove that it owns your debt by showing the court the contract of sale. This contract is called an “assignment.” The assignment must mention your debt specifically. If your debt has been bought and sold multiple times, the debt buyer must present a chain of assignments that goes all the way back to your original creditor.
Proof that the debt is yours. Usually, this means an original contract with your signature.
Proof that the amount demanded in the lawsuit is correct. Usually, this means a complete set of bills or account statements. In the case of a credit card, the plaintiff also has to prove that each and every charge on the card was authorized.
All of this proof must come in a specific format, or else it is considered “hearsay,” not admissible in court. If the plaintiff fails to meet its burden of proof by coming up with admissible evidence of your debt, the court must dismiss the case.

The plaintiff has to present quite a lot of evidence in order to meet its burden of proof. This evidence is often difficult or expensive for the plaintiff to produce. If your debt is old, or if it has been bought and sold multiple times, evidence of your debt may not exist at all. It is almost always much easier and cheaper for the plaintiff to dismiss the case than to come up with all the evidence needed to meet the burden of proof. That is why the plaintiff will nearly always want you to agree to a settlement.

KNOW YOUR RIGHTS!
If you believe you do not owe the debt, never agree to a settlement. Insist on your defenses and put the plaintiff to its proof. If you have a solid defense, you have a good chance of winning the case.

If you would like to negotiate a settlement, use your knowledge of the burden of proof to make sure you get a settlement that works for you.

If you cannot afford to make a settlement agreement, or if your income is exempt from debt collection, you should put the plaintiff to its proof. There is a good chance that the plaintiff will be unable to meet its burden, and the case will eventually be dismissed.

Remember: If you do not appear in court, you will automatically lose. Showing up is often more than half the battle!

VACATING A DEFAULT JUDGEMENT

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A judgment is the court’s written, final decision in the case. If the judgment is against you, it will state how much money you owe to the plaintiff.

A “judgment creditor” is a creditor or debt buyer that has obtained a judgment against a defendant.

When a defendant fails to file a written Answer with the court (“defaults”) the court will issue a judgment against the defendant. A judgment issued under those circumstances is commonly known as a “default judgment.” The court usually awards the plaintiff the amount demanded in the complaint, plus interest and court costs. The court usually awards attorneys’ fees on a default judgment based of a schedule published by the court.

Yes. Under certain circumstances, it is possible to vacate (re-open) a default judgment. The court has a special procedure for determining whether to vacate a default judgment. The procedure is relatively straightforward, but often requires a noticed motion and a hearing before the judge.

What are the criteria for vacating a default judgment?

There are two main reasons that a court will vacate a default judgment: (1) excusable default and (2) lack of personal jurisdiction. These reasons are explained below.

Excusable default is the most common reason for vacating a default judgment. It has two parts: (1) a reasonable excuse for not filing an Answer within the 30 day time; and (2) a meritorious defense (a good defense). There is a time limit for moving to vacate a judgment because of excusable default — 180 days from the entry of the Judgment. (If you were never served with a Notice of Entry of the Judgment, the time limit is extended to 2 years.)

Common examples of a reasonable excuse: The most common example of a reasonable excuse is that you did not receive the Summons. Other reasonable excuses are that at the time you received the Summons you were out of town, ill, incarcerated, or that you could not answer the Summons for some other good reason. You would also have a reasonable excuse if, in response to the Summons, you telephoned the attorneys for the plaintiff and they told you not to bother filing an Answer.

Sometimes people do not respond to the Summons because they do not understand what it is. This is not normally considered to be a reasonable excuse; however, some judges will accept it.

Common examples of a meritorious defense: A defense is a reason why you don’t owe the money, not a reason why you can’t pay. For example, you would like to use the defense of identity theft or statute of limitations. For a list of possible defenses, see Common Defenses to Debt Collection Lawsuits. You can also simply dispute the amount of the debt. Disputing the amount of the debt, combined with improper service, is a sufficient (and very common) reason for the court to grant an order vacating the default judgment.

The court can also vacate a default judgment if you were not properly served with a Summons. There are advantages and disadvantages to trying to vacate a judgment on the grounds of improper service. The main advantage is that there is no time limit for seeking to vacate a judgment on the grounds of lack of jurisdiction. Also, if you seek to vacate a judgment because of improper service, you do not need to cite a meritorious defense (or any defense). The disadvantage of seeking to vacate a judgment on the grounds of improper service is that you have the burden of proving the bad service, which you must do at a hearing before the judge. Proving improper service can be difficult depending on the facts of your case.

First, find out which court issued the judgment. (In a debt collection case, you will most likely need to go to the Civil Division of the Superior Court in the county where you live.) Next, go to the court that issued the judgment and find the civil court clerk’s office. There, tell the clerk that you want a copy of the entire court file for your case. The clerk may give you a pre-printed document request form to fill out. Once you have obtained a complete copy of the court file for your case, contact one of our sponsoring attorneys to review your case without cost or obligation.

At the court hearing, you will most likely find yourself sitting in a courtroom with a number of other people who are in the same position as you. The court clerk will call out your name, and you should answer clearly. The attorney for the plaintiff may call out your name as well. The plaintiff’s attorney might consent to vacating the judgment or ask whether you want to make a settlement agreement. No matter what the plaintiff’s attorney says to you, it is important that you focus on making sure that the default judgment is vacated. If the plaintiff’s attorney does not consent to vacating the judgment, you should ask to go before the judge. When you are before the judge, you must focus on the arguments you made in your Motion to Vacate. Simply keep repeating (1) your good reason for failing to file an Answer; and (2) your defense in the case. As long as you have a reasonable excuse and a meritorious defense, the judge should grant the Motion to Vacate and vacate the judgment against you. If you want to argue lack of jurisdiction because you were not served with a Summons, you must do it at this time.

Once the default judgment is vacated, the plaintiff must release your bank account and cancel the wage garnishment. This is included in the court’s order vacating the judgment.

Probably not. In most cases, even though the judgment is vacated, you still have to defend the case. That means you have to file an Answer and attend at least one additional court date.

WAGE GARNISHMENTS

This guide provides general information for Californians who are facing debt collection lawsuits in the Superior Courts of California. It does not apply to courts outside the state of California. It is not a substitute for obtaining legal advice in your individual case.

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A wage garnishment occurs when a court or the government orders your employer to set aside some of your earnings to pay a debt.

The amount of your wages that can be garnished for a private debt varies according to your income. Private debts include credit cards, medical bills, bank loans, and private student loans. Private debts do not include child support, taxes, or government student loans. As of July 24, 2009, the amount of wages that are exempt from garnishment is as follows.

If your disposable income is less than $217.50 per week:

All of your earned income is exempt from debt collection. Your wages CANNOT be garnished.

If your disposable income is between $217.51 and $290.00 per week:

The creditor may garnish whatever you earn above $217.50 per week.

If your disposable income is greater than $290.01 per week:

The creditor may garnish 25% of your disposable income.

If you are already being garnished for child support or spousal support:

You can still be garnished to pay a private debt, but only up to 25% of your disposable income.

Your “disposable income” is the amount of money you take home after deductions for state and federal income taxes, federal Social Security, state disability insurance and public employee retirement systems.

Your gross income is the amount you earn before any deductions are made.

No. Social Security and other benefits are completely exempt from debt collection and cannot be garnished to pay a private debt.

All wage garnishments for private debts begin with a debt collection lawsuit.
The creditor must obtain a judgment against you in order to garnish your wages. In California, the vast majority of judgments against consumers are obtained by default.
Armed with a judgment, the creditor will obtain a wage garnishment order from the court clerk. This order is called a “Earnings Withholding Order.”
Within 10 days of receiving the Earnings Withholding Order, your employer must give you a copy of the order and a copy of the Employee Instructions.
Once you are served with Earnings Withholding Order and Employee Instructions, you can ask for an exemption by completing a Claim for Exemption form and a Financial Statement. Once completed, you must mail or deliver two (2) copies to the levying officer (in most cases the County Sheriff).

If you receive a wage garnishment notice, you can be sure that a creditor has obtained a judgment against you. Therefore, you should consider whether you have grounds to cancel or vacate the judgment. If you can vacate the judgment, the creditor will no longer have the ability to garnish your wages, nor can the judgment appear on your credit report. In order to vacate the judgment you will have to file court papers and appear in court at least once, and possibly more than once. For most people, it is worth it to take the time and effort to vacate the judgment. For additional information, see Vacating a Default Judgment.

Even if your wages are already being garnished to pay a private debt, you may have the right to vacate the judgment and stop the garnishment, especially if you were never properly notified of the lawsuit. If the judgment is vacated, not only will the garnishment stop, but the court can order the creditor to return to you all the money that it took to pay the debt.

Even if you choose not to try to vacate the judgment, you always have the right to go to court and ask the court to modify the amount of your garnishment. To do this, you need to complete a Claim for Exemption form and a Financial Statement. Once completed, you must mail or deliver two (2) copies to the levying officer (in most cases the County Sheriff). You should also consider discussing your options with an attorney. You can also contact one of our sponsoring attorneys to obtain individualized advice about your case.

Usually not. If you are already being garnished at the maximum amount, then the rest of your wages are exempt from debt collection, even if they are deposited in a bank account.

Yes, but only up to the maximum amounts specified above. Usually, what happens with multiple garnishments is that the first creditor takes the maximum amount possible. The second creditor must wait until you finish paying the first creditor. Only then can the second creditor garnish your wages.

No. Your employer cannot fire you if your wages are garnished.

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