We often remind readers of our blog of the importance of understanding rules before beginning judgment collection efforts. We operate in nearly a dozen states, including California. We can testify to the fact that things can differ quite a bit from one state to the next.
To illustrate the point, we will focus on California in this blog. There are a number of unique aspects to judgment collection in California. If you are a California creditor and you don’t understand how the game is played, you could struggle in your efforts to get paid.
1. The Rosenthal Fair Debt Collection Practices Act
California’s Rosenthal Fair Debt Collection Practices Act (RFDCPA) is a state law designed to prevent abusive practices by debt collectors. It goes above and beyond the federal Fair Debt Collection Practices Act (FDCPA).
One of the most interesting aspects of California’s legislation is that it applies to both original creditors and third parties, like debt collectors. Some of what is required by the RFDCPA is unique to the Golden State.
In addition, the legislation was recently expanded to include certain types of commercial debt valued at up to $500,000. As such, the Act applies some of the most appreciated consumer protections to small businesses.
2. Wage Garnishment Limits
Although limits on wage garnishment are not unique to California, it is worth discussing what California’s limits are. The maximum amount allowed under California rules is 25% of a judgment debtor’s disposable income.
Disposable income is income not necessary to pay the debtor’s basic expenses. Let us arbitrarily say that 25% of a debtor’s income is disposable. A judgment creditor could only garnish 25% of that amount. For every $100 earned, just $6.25 could be garnished.
3. Collecting via Till Tap
California’s rules allow for some unique means of collection. A good example is the till tap. Here is how it works: if a judgment debtor operates a business involving a physical location and a cash register, the creditor can request that a sheriff’s deputy visit the business and remove all cash and checks from the register. The money would then be given to the creditor.
An advantage of the till tap is that it offers immediate access to cash. Its biggest disadvantage is that the till tap is a one-time thing. If the creditor wanted another till tap later in the week, he would have to initiate the formal process for requesting one.
4. Collecting via Keeper Levies
California allows another strategy similar to the till tap. Known as keeper levies, it involves sending the sheriff’s office to the debtor’s business for an extended amount of time. That amount of time is predetermined. However, during its entirety, all the receipts taken in by the business are given to the sheriff for forwarding to the creditor.
Debtors have a solid defense against both till tap and keepers levies: closing down. A debtor’s receipts cannot be seized if they choose not to operate their business.
We Are Here to Help
Attempting to collect a money judgment on your own is difficult in any state. It can be more difficult in California due to the unique nature of some of the Golden State’s rules. If you need help with a judgment, don’t hesitate to contact Judgment Collectors.We focus exclusively on judgments. As such, we are able to concentrate on being the best judgment collection agency we can be. We also work on consignment. That means we do not get paid unless we collect. You have nothing to lose by letting us take a look at your case.
