If you are dealing with overwhelming debt and you are having a hard time paying it off, you might be worried about creditors seizing your assets. Our Los Angeles bankruptcy attorneys explain which assets creditors can take from you if you fail to take action.
Which Assets Can Collectors Take from Me?
Debt collectors can only take money from your paycheck, bank account, or benefits – this is known as wage garnishment. If creditors have already sued you and a court entered a judgment against you for the amount of money you owe, the creditor can take money from your accounts to put towards the debt you owe.
However, the law sets certain limits on how much debt collectors can garnish your wages and bank accounts. Certain federal benefits, such as social security benefits and veterans’ benefits, cannot be garnished. Generally, real estate and other forms of property are protected when a creditor is implementing the wage garnishment collection tool.
What Should I Do If Creditors Are Suing Me?
If you get a summons notifying you that a debt collector is suing you, don’t ignore it. If you do, the collector may be able to get a default judgment against you and garnish your wages and bank accounts. You should also contact an experienced attorney as quickly as possible to discuss your options.
Dealing with Overwhelming Debt
If your creditors haven’t suited you to collect your debt, it could only be a matter of time. Avoiding your debt problem could only make matters worse. Thankfully, our team at Wadhwani & Shanfeld is here to help you. We have helped over 20,000 individuals across California repair their financial problems and achieve debt relief. Regardless of whether you are facing wage garnishments or you want to fix your financial situation, our team is here to help.
Contact our Los Angeles bankruptcy attorneys today at (800) 996-9932 to schedule a consultation!
By Wadhwani & Shanfeld | Posted on August 4, 2021
FAQs
California 704 Homestead Exemption
In System 1 (also known as § 704 exemptions), you can exempt real or personal property you reside in at the time of filing for bankruptcy, including a mobile home, boat, stock cooperative, community apartment, planned development, or condominium, up to $600,000 - 704.730.
What property is exempt from creditors in California? ›
California 704 Homestead Exemption
In System 1 (also known as § 704 exemptions), you can exempt real or personal property you reside in at the time of filing for bankruptcy, including a mobile home, boat, stock cooperative, community apartment, planned development, or condominium, up to $600,000 - 704.730.
What personal property can be seized in a judgement in California? ›
If you do not pay the judgment, the judgment creditor can garnish or "seize" your property. The judgment creditor can get an order that tells the Sheriff to take your personal property, like the money in your bank account or your car, to pay the judgment.
What assets are protected in California? ›
California law allows residents to create a private retirement plan that can include a private retirement trust. Property identified as retirement assets is protected from bankruptcy and creditors, regardless of their IRS qualification. The retirement assets are protected both in the plan and when they are distributed.
How do I protect my assets from judgments in California? ›
6 Ways To Protect Assets From Lawsuits Or Creditors
- Limited Liability Company (LLC)
- Trust (Irrevocable)
- Insurance Policies.
- Homesteads.
- Titling – Play Safely.
- Transfer The Assets.
Instead, “hiding” assets wisely involves doing things like:
- Putting the assets in offshore accounts or trusts where your creditors may not know to look.
- Putting assets in places where they are unreviewable by creditors or lawsuit plaintiffs so they don't know how much money “you” have.
Exemption from the Enforcement of Judgments
| Type of Property | Code |
|---|
| Social Security Direct Deposit Accounts (the account itself) | CCP § 704.080 |
| Wages | CCP § 704.070 |
| Public Assistance (Welfare) | CCP § 704.170 W&I § 17409 |
| Charity; Fraternal Benefit Funds | CCP § 704.170 |
27 more rowsBoth state and federal laws protect essentials such as basic clothing, ordinary household furnishings, food, and Social Security and disability benefits from being taken to pay for a judgment. 42 U.S.C. § 407; California Code of Civil Procedure (CCP) §§ 704.010 – 704.210.
Can a judgement creditor take my car in California? ›
Although a judgment creditor can seize your property and vehicle against the debts you owe, you can protect yourself if you move fast and respond to the lawsuit. A debtor rights attorney can also help you if you are already facing judgment. Know your rights and protect your assets.
How to collect money after winning a judgement in California? ›
You must hire a levying officer (a registered process server or a sheriff's deputy) to collect your judgment. You cannot serve the Writ yourself. Look at the information you have about your debtor's assets. Then tell the levying officer about the assets and where they are.
In addition, workers' compensation, unemployment, pension, Social Security, welfare, or insurance payments are protected and can't be taken to satisfy a judgment. At your request, the small claims court clerk or a small claims adviser can give you a list of assets that are protected (exempt assets) in California.
What is the strongest asset protection? ›
Trusts are one of the strongest asset protection tools you can use. They can protect your assets from creditors, legal claims, and anything else threatening your estate or business.
What money is protected from creditors? ›
Certain federal benefits, such as social security benefits and veterans' benefits, cannot be garnished. Generally, real estate and other forms of property are protected when a creditor is implementing the wage garnishment collection tool.
How do I make my assets Judgement proof? ›
In most cases, all of the following must apply for you to be judgment proof:
- your debt is all unsecured.
- your income can't be garnished.
- all of your property is protected by exemptions (you don't own anything with a lot of value, like a house or vehicle with equity, or household items), and.
Irrevocable trusts are commonly used for asset protection. In this regard, the law uses the “step into their shoes” theory. That is, whatever debtors could do, personally, the creditors can step into their shoes and do the same. The settlor of an irrevocable does not have direct access to the assets held in the trust.
How to protect assets from medical bills? ›
Setting up an irrevocable trust can help protect your assets from medical expenses, as the assets covered by the trust cannot be claimed by creditors. Another way to protect your home can be by transferring the ownership to a family member. This can protect your home from being seized to pay medical bills.
Is your home protected from creditors in California? ›
California has a homestead exemption, a type of legal protection that limits the amount of money creditors can claim from a debtor's home if they have fallen behind on payments. This exemption allows debtors to keep some of their assets, such as their homes, even if they have not been able to make payments on them.
Is your primary residence protected from creditors in California? ›
A homestead exemption protects home equity from a homeowner's creditors, up to a certain dollar amount. Collectors cannot acquire any funds within this amount to settle past-due debt. This applies if you file for bankruptcy or you experience financial difficulties after a divorce or your spouse passes away.
Can a creditor force the sale of my home in California? ›
Under California law, debt collectors have the right to place a lien on a person's home once they get a judgment. California law then lets the debt collector force the sale of a person's home to collect the judgment, even if that property is the debtor's only home.
