In today’s workforce, many individuals are classified as independent contractors by their employers. Collecting unpaid debts from a 1099 independent contractor can be a complex process, as traditional wage garnishment is only effective against W-2 employees. For independent contractors, a more labor-intensive method known as an assignment order can be utilized. This blog post provides an overview of assignment orders and how they can be used to collect California judgments.
How Does an Assignment Order Work?
An assignment order is obtained through a noticed motion. Under Code of Civil Procedure §708.510, a court can issue an order directing the judgment debtor to assign to a judgment creditor all or part of a right to payment due or to become due. This can include wages from the federal government that are not subject to withholding under an earnings withholding order, rents, commissions, royalties, payments from patents or copyrights, insurance policy loan values, accounts receivable, general intangibles, judgments, and instruments.
While the court may consider all relevant factors, the primary constraints are that the right to payment should be assigned only to the extent necessary to satisfy the creditor’s money judgment. Additionally, if part of the payments are exempt, the assigned amount should not exceed the difference between the gross amount of the payments and the exempt amount.
Once you obtain the assignment order, it must be served on the third party responsible for making the payments.
An assignment order is a crucial tool in the judgment collection toolbox. If you need assistance with collecting your judgment, contact our office for a consultation.
