In California post judgment execution, understanding the whole process is key.  We have gone over the nuts and bolts of how to do a wage garnishment on a previous post you can check that out here.  For this post, we turn the spotlight to an equally critical aspect: opposing claims of exemption.

When a debtor files this claim of exemption, claiming certain portions of their wages or bank account as exempt, it requires specific timely action, or you will automatically lose the funds you have worked so hard to get.   This guide equips you with the knowledge and strategies to navigate the process of contesting the exemption.

 AUTOMATIC EXEMPTIONS

Some exemptions are automatic meaning the debtor will get them without having to do anything.   An example of this on the garnishment side would be if the debtor makes less than the threshold money amount per paycheck be garnished or the bank levy side if public benefits like disability or Social Security checks are identifiable in the account.  These sorts of exemptions are not challengeable.  

Exemptions that are not automatic can be challenged if a specific timely formula is followed. For this post we will focus on the exemption our office receives most often: the funds are exempt because they are necessary for the care and support of family.

 PROCESS OF CLAIMS OF EXEMPTION

When is judgment debtor files this claim of exemption submit the claim of exemption which states the basis for the exemption, what amount they claim is exempt and an amount which they would be willing to accept as a garnishment per pay period along with a financial statement that details their income and expenses with the sheriff’s department in the county that the levy or garnishment was done.  You can see the financial statement form here .   Once a claim of exemption is received by the Sheriff’s Office they will send notice of the claim of exemption and financial statement to the judgment creditor.   The notice to the judgment creditor will have the date that it was served.   This is critical to note because the way these exemptions work is that the levying officer (Sheriff) will release the money to the judgment debtor automatically unless the judgment creditor files with the court and serves an original notice and opposition to claim of exemption on both sheriff and judgment debtor within the time specified by law. 

 SUPPORT OF FAMILY EXEMPTION

The law on opposing an exemption for funds necessary for the support of family, There is no precise definition of what is “necessary” for the support of a judgment debtor or his or her family. “Necessary” expenses normally include housing costs, food, insurance, automobile costs, etc. However, the court must consider the circumstances surrounding each individual case—what is “necessary” in some circumstances may be a luxury in others. J.J. MacIntyre Co. v. Duren (1981) 118 Cal.App.3d Supp. 16, 18.    The best way to approach this to look at the debtors financial statement and identify expenses that are excessive and luxuries (You would be surprised at how often I’ve seen a multiple financed luxury car payments listed on these financial statement forms) then ask for a number that is less than the total amount you feel is exempt. A lot of times debtors will list installment agreement contracts like credit card payments.   In my experience, judges tend not find these as exempt. There is a lot of leeway for the judge to use his or her discretion to determine the exemption.  

 LAW OFFICE OF BRYAN M. GRUNDON FOR YOUR CALIFORNIA COLLECTION ISSUES

Opposing a claim of exemption is a highly technical process with significant time pressure.  For help with opposing a claim or exemption or other collection issues in the State of California contact our office HERE

Till Taps in California: Using Disruption to Enforce a Judgment

Obtaining a judgment is only the first step in the collection process. Many judgment debtors ignore judgments because they assume nothing will actually happen after the court enters the order.

In practice, collecting judgments usually comes down to one thing: disruption. When a debtor refuses to deal with a judgment voluntarily, the most effective enforcement tools are the ones that disrupt the debtor’s normal operations and prevent them from operating normally until the judgment is collected.

For businesses that operate a storefront, one of the most direct ways to create that disruption is a Till Tap.

A Till Tap allows the Sheriff to enter the debtor’s business and seize the cash currently sitting in the register or cash drawer. It is simple, direct, and often very effective at forcing a debtor to address the judgment.

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Legal Authority for Till Taps Under California Law

Till Taps are authorized under California’s Enforcement of Judgments Law.

The process begins with a writ of execution. Under California Code of Civil Procedure section 699.510, a judgment creditor may obtain a writ of execution authorizing the levying officer, typically the county Sheriff, to enforce the judgment.

Once the writ is issued, the creditor provides levy instructions directing the Sheriff to perform the Till Tap at the debtor’s place of business.

California Code of Civil Procedure section 700.070 authorizes the levying officer to enter a business and seize the cash contained in the cash register or cash drawer. This type of levy is what practitioners commonly refer to as a Till Tap.

If you are unfamiliar with the broader enforcement framework, you may want to review How to Enforce a Judgment in California, which explains how writs of execution and other enforcement tools fit together.

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How a Till Tap Actually Happens

Once the writ of execution is issued, the creditor sends levy instructions to the Sheriff requesting the Till Tap at the debtor’s business.

In many counties you can request that the levy occur at a specific date and time. The Sheriff is not obligated to perform the levy at that exact moment, but if the request is made far enough in advance and falls within normal operating hours, many Sheriff’s offices will try to accommodate the requested timing.

The Sheriff’s deputy arrives at the business during operating hours, identifies themselves, and executes the levy by seizing the cash currently in the register or cash drawer.

Because a Till Tap occurs at a single moment in time, the amount collected depends entirely on how much cash happens to be present when the deputy arrives. Some levies recover very little cash, while others recover substantial amounts depending on the nature of the business and the timing of the levy.

Even when the amount recovered is modest, the disruption to the business is often what produces results. When a Sheriff walks into a business and empties the cash register, the debtor usually realizes that the judgment creditor is actively pursuing collection and that further enforcement actions may follow.

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Confirming the Business Before the Levy

Before instructing the Sheriff to perform a Till Tap, it is important to confirm that the business actually belongs to the judgment debtor.

When a deputy arrives to perform a Till Tap or Keeper Levy, they will usually confirm that the business license displayed at the storefront matches the name of the judgment debtor listed on the writ of execution.

If the business operates under a fictitious business name, it is important to confirm that the fictitious business name is properly tied to the debtor. In some situations you may need to provide documentation showing that relationship, or include the name through an affidavit of identity.

Resolving that issue ahead of time helps avoid delays when the Sheriff arrives to execute the levy.

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When a Till Tap Is the Right Tool

Till Taps tend to work best when the debtor operates a physical business that regularly handles cash. Restaurants, retail stores, and similar storefront operations are common examples.

If the business processes most of its revenue through credit card transactions, however, a Keeper Levy may be the more effective enforcement tool.

During a Keeper Levy, the Sheriff places a keeper inside the business for a period of time and the business is restricted in how it can process payments. In many cases the presence of the keeper prevents the business from processing credit card transactions during the levy period, which can be far more disruptive than a single Till Tap.

The choice between these tools often depends on how the business actually receives its revenue.

For example, if a debtor is ignoring a judgment and operating a storefront business, it may make sense to combine a Till Tap with other enforcement efforts such as bank levies and assignment orders. When the debtor suddenly finds that both the business register and their bank account are subject to levy, they often become much more willing to address the judgment.

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Final Thoughts

Till Taps remain one of the most effective enforcement tools available for collecting judgments against operating businesses in California. They are simple, direct, and capable of creating immediate disruption for a debtor who has been ignoring a valid judgment.

In many cases, the goal of a Till Tap is not simply the amount of cash recovered in the register on that particular day. The real purpose is to demonstrate that the judgment creditor is actively enforcing the judgment and will continue doing so until the debt is satisfied.

If you are attempting to collect a judgment against a business in California and want to evaluate your enforcement options, you can request a Free Judgment Enforcement Evaluation to discuss possible strategies.

HOW TO LEVY A BANK ACCOUNT IN CALIFORNIA

I am a huge fan of the TV show How I Met Your Mother. Whenever I hear about something associated with malls, I immediately think of Robin Sparkles’ hit song, “Let’s Go to the Mall.” But now I like malls for another reason: I can have a major bank served with a bank levy there. How is that possible? I’ll get there, but first, let’s discuss the process of levying a bank account.

HOW TO LEVY A BANK ACCOUNT

Once you have obtained a judgment, the basic process for levying a bank account is as follows:

1. Figure out where your debtor banks. There are several ways to go about this, but I am not going to get into that in this post. Once you have determined where they bank, you must check the State of California’s website, which identifies the proper branch to serve bank levies here Bank Levy Central Branch Locator.
2. Obtain a writ of execution for the county that has the correct bank branch. As I discussed in my nuts and bolts of wage garnishment post, the judgment is not the instrument that you need to do bank levies. A writ of execution is the document needed. A writ of execution can be issued for each county in the State of California. Writs are valid for 6 months and can be renewed as long as your judgment is valid. In California, judgments are valid for 10 years and are infinitely renewable.
3. Send the writ with levy instructions to the sheriff of the county. This is another situation where different counties have different instructions for levies and require different things to be submitted. The best source to figure out what is necessary to be submitted is the website of the county sheriffs. Some counties do not have any instructions at all. In that case, you must write your own. We make sure that we keep templates saved for each county in our forms library for quick access. As I mentioned in the wage garnishment post, some county sheriffs will not serve bank levies. In that situation, or the situation where the county sheriff is overwhelmed, which is sometimes the case in Los Angeles and Sacramento, you hire a private process server to serve the levy. You would still have to have the process server open the levy with the sheriff, which is the official levying officer (where the return to the levy must be sent and funds from the levy must be sent).
4. Once the levy is served on the proper bank branch, the bank has a certain time in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and we will have to send them a friendly reminder that they need to respond or face a creditor’s lawsuit.
5. Once they respond with information on the levy, the judgment debtor is notified of the levy, and they have a certain period of time to claim the funds exempt. Once that time passes, if no claim of exemption is filed, then the bank turns the money over to the sheriff, and then the sheriff cuts us a check.

If you need help levying a bank account contact us HERE

How to Levy Rent From Tenants in California

The name of the game in judgment collection is disruption. If a debtor is allowed to continue doing business as usual, collecting a judgment becomes much harder. One effective way to disrupt that normal flow of business is by intercepting rent payments owed to the debtor.

If a judgment debtor owns rental property, tenants are sending money to that debtor every month. California law allows a judgment creditor to levy on those rental payments so that the tenant pays the levying officer instead of the landlord. When that happens, the debtor suddenly stops receiving rent from their own property and those payments begin going toward the judgment.

A rent levy turns the debtor’s own income-producing property into a collection source.

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What a Rent Levy Actually Is

A rent levy is simply a levy on a debt owed to the judgment debtor. The tenant owes rent to the landlord. When the landlord becomes a judgment debtor, that rent obligation can be intercepted through a writ of execution.

California’s Enforcement of Judgments Law provides that all property of a judgment debtor is subject to enforcement of a money judgment. See California Code of Civil Procedure §695.010.

Because rent is a payment obligation owed to the debtor, it qualifies as property that may be reached through levy.

California law specifically provides that a levy on a debt owed to the judgment debtor is made by serving the person who owes the debt with a notice of levy. See California Code of Civil Procedure §700.170.

In the context of rental property, the tenant is the person who owes the debt.

Once the tenant is served with a writ of execution and notice of levy, the tenant must redirect rent payments to the levying officer instead of paying the landlord.

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The Procedure for Levying Rent

From a procedural standpoint, a rent levy follows the same execution framework used for other obligations owed to a judgment debtor.

First, the creditor must obtain a writ of execution issued by the court for the county where enforcement will occur.

Second, the creditor prepares levy instructions directing the sheriff or marshal to levy on rent owed by the tenant to the judgment debtor.

Third, the writ of execution, notice of levy, and levy instructions are delivered to the levying officer for service.

The sheriff or marshal then serves the tenant as the third-party obligor. Service of the writ and notice of levy creates an execution lien on the obligation owed to the debtor.

Once the tenant has been served, the tenant is legally required to pay the rent to the levying officer rather than to the landlord. Those payments are then applied toward satisfaction of the judgment. See California Code of Civil Procedure §701.010.

In practical terms, the rent that would normally go to the debtor is intercepted and redirected toward the judgment.

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A Practical Limitation on Future Rent

Courts recognize that rent obligations can sometimes be contingent because the tenant’s obligation to pay rent depends on continued possession of the property.

In Hustead v. Superior Court, the court observed that distant future rent obligations may be too speculative to qualify as a present debt subject to garnishment. As a practical matter, a levy typically reaches rent that is currently due or becomes due during the execution lien period, rather than speculative long-term rent obligations.

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Why Rent Levies Are So Effective

Many judgment debtors who own rental property rely on rent as a steady income stream. When that stream is interrupted, the debtor immediately feels the pressure.

Unlike bank accounts, which can be emptied or moved, rental income tends to arrive on a predictable monthly schedule. Once tenants are properly served with a levy, those payments can be redirected toward the judgment until the levy expires or the judgment is satisfied.

That kind of disruption often gets a debtor’s attention very quickly.

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Rent Levies Within the Larger Enforcement Process

A rent levy is just one tool within California’s broader judgment enforcement framework. Effective collection typically involves identifying the debtor’s assets and choosing the enforcement mechanisms most likely to reach them.

If you want to learn more about how judgment enforcement works in California, you can read about the process here:

→ What We Do: California Judgment Enforcement

If you hold an unpaid judgment and believe the debtor owns rental property, you can also submit the judgment for review here:

→ Request a Free Judgment Evaluation

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One of the most common tools to enforce a judgment is to levy a bank account.  A levy is a process where you serve your debtor’s financial institution (they can be used for credit unions too) and it captures all the money in the account at time the levy is served (less automatically exempt funds like social security or disability payments).  

To use this judgment enforcement tool, the first thing you would need to do is to determine where your judgment debtor banks.   There are many avenues to accomplish this. One example is, if you have a credit application from your debtor it will likely include this information.   Another example, if you paid your judgment debtor in the past, or they paid you, you can check cancelled checks or ACH’s to determine this.   As a last resort, if you don’t have any information you can serve the judgment debtor with an order to appear for an examination (See past blog: The Detective Aspect of Collecting), or to hire a skip tracer to do a bank account search.   

Once you’ve determined where they bank, you must find the proper place to serve the levy. When I first started practicing law, if you wanted to do a bank levy you had to serve it at the branch at which the account was opened in order for it to be effective.   So, even if you knew that your debtor had money at a big bank like US Bank or Bank of America, you would still have a difficult time hitting on a levy. California law now requires financial institutions to designate a central location for bank levies to be served. This accomplished by checking: www.dbo.ca.gov/Laws_&_Regs/legislation/service_of_legal_process/. If the financial institution doesn’t designate a central location, you can serve levies at any branch in the state. In the case that the institution doesn’t have a central location, I recommend that you avoid serving bank levies in the Bay Area, Sacramento, or Los Angeles.

Next, you need to obtain a writ of execution for the county you want to serve the levy in. As I discussed in my Nuts and Bolts of Wage Garnishment post, the judgment is not the instrument that you need to do bank levies, but instead a writ of execution is the document needed. A writ of execution can be issued for each county in the State of California. Writs are valid for 6 months and can be renewed as long as your judgment is valid. In California, judgments are valid for 10 years and are infinitely renewable.

Finally, you must send the writ with levy instructions to the sheriff of the county. This is another situation where individual counties may have different levy instructions and require particular things to be submitted. The best source to figure out what is necessary to be submitted is the website of the county sheriffs. Some counties do not have any instructions at all. In that case, you must write your own. We make sure that we keep templates saved for each county in our forms library for quick access. As I mentioned in the The Nuts and Bolts of Wage Garnishment post, some county sheriffs will not serve bank levies. In that situation, or the situation where the county sheriff is overwhelmed (which is sometimes the case in Los Angeles and Sacramento), you hire a private process server to serve the levy. You would still have to have the process server open the levy with the sheriff, who is the official levying officer (where the return to the levy must be sent and funds from the levy must be sent). Once the levy is served on the proper bank branch, the bank has a certain time period in which it must submit a response to the levy to the sheriff. Occasionally, a bank will not respond to the levy, and in that case we will have to send them a friendly reminder that they need to respond or face a creditor’s lawsuit.

Once they respond with information on the levy, the judgment debtor is notified of the levy, and they have a certain period of time to claim the funds exempt. Once that time passes, if no claim of exemption is filed, then the bank turns the money over to the sheriff, and then the sheriff cuts us a check.

Claims of Exemption

by Antonia Gordon and Bryan Grundon

There are many ways to collect on a judgment. Wage garnishments and bank levies happen to be two of the most common and reliable methods. With the first, we can garnish a debtor’s wages and thus ensure consistent payments on a judgment. With the second, we gain access to whatever funds a debtor has in their account at the time of the levy.

Unfortunately, garnishments and levies may not always be completely successful. After the Sheriff serves one of these on a bank or employer, the debtor receives notice and has a chance to respond to it. They can complete a form called a claim of exemption, which allows them to claim part (or all) of their wages or the funds in their bank account as exempt. If the claimed wages or funds are necessary to support the debtor or their family, the court may grant their claim (in full or in part), and we will not be able to collect the full amount from the garnishment or levy. The debtor, however, must provide proof that their earnings or funds are exempt. The first step to this is filling out a financial statement in which they list their monthly earnings and expenses, including those of their spouse.

Once a debtor files a claim of exemption, you have the opportunity to oppose it. If you do not oppose it by following a very specific procedure, the exemption is granted by operation of law. Opposing a claim of exemption involves reviewing the debtor’s financial statement to look for any inconsistencies or excessive spending. If we believe that the debtor can afford to pay more than they claim, we will set a hearing with the court and file paperwork to oppose the claim. At the hearing, both parties will get the chance to argue their side. In most cases, the debtor can afford to pay at least a small amount, even when they claim they cannot afford to pay anything at all. In their financial statements, debtors may overestimate how much they spend on certain things, such as food and gas. We have even had debtors claim they make a certain amount per month only to have their employer reveal that they actually make significantly more. Judges are never happy to see this kind of deception! We make sure we have the full story before going to court, so the debtor ends up paying what they can actually afford, and you are able to collect on your judgment.

 You’ve gone through the trouble of obtaining a judgment and now you want to collect on it.    One of the best ways to do that is to garnish your debtor’s wages.    How exactly does that work?   First thing you need to do is figure out who their employer is or if the debtor is a W-2 employee.  If the person is a 1099 independent contractor wage garnishment will not be effective you will need an assignment order which requires a completely separate procedure. If you know that already then find where that company’s agent for service of process in California is located.   When you’ve figured out what county that person is located in you need to obtain a writ of execution from the court for that county. 

 Once a writ of execution is issued it is valid for 6 months.   You take the writ of execution and you submit an application for earning withholding order.  Each county is different as to exactly what you have to prepare and submit with the package.     You send the completed package with the writ of execution to the sheriff’s department.   Some counties in California (notably most Bay Area counties) will not directly serve the earnings withholding order.  You have to basically open the wage garnishment by paying the Sheriff to open the file then hire a private process server to actually serve the whole earnings withholding on the debtors employer.   

A similar process can be used to serve garnishments in counties that are extremely backed up with serving process particularly Sacramento and Los Angeles county which seem to house the most. The employer has an obligation to return their response called the employers return.    The employer has to state whether the person is employed there or not, how frequently they are paid, and the amount of pay there last pay period.  Finally, The employer has to state whether any other orders affecting the employee’s wages are present and, if so, whether they have higher priority (family support order notably jump ahead of civil orders).   There is a threshold for garnishing wages.  Employees have to make a minimum to have the wages garnished.  There is also a maximum percentage of wages that can be garnished 25% of disposable income.   If there are multiple orders the first in time is paid in full first before others are paid (similar to first in time for a lien on a piece of real property).  

 Assuming, you have the highest priority and the debtors doesn’t claim the funds exempt (see our blog post on Claims of Exemption) then the employer will send the funds the sheriff.  The sheriff will then hold the funds for some period of time, usually several weeks then cut you a check for the amount garnish less their fees ($12.00 per check-  this amount is charged to the debtor).

Contact us HERE for help collecting your California judgment using wage garnishment.