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A creditor is garnishing my wages to pay credit card debt from 15 years ago. I thought the statute of limitations was only four years in California!
Wage garnishments can seem to come out of the blue.
Often the garnishment is collecting on a very old judgment.
Maybe the garnishee (the person whose wages are being garnished) forgot all about the judgment.
Maybe they never knew about the judgment in the first place.
Sometimes the person knew about the judgment, but thought it had expired due to the statute of limitations.
Sometimes the person thought that judgments automatically expire after ten years.
So, let’s discuss some common myths about garnishments collecting on old judgments.
***The rules for domestic support obligations, student loan debts, and taxes are different. This post deals with “typical” unsecured debts like credit cards, personal loans, medical debts, and a few others. Give us a call for a free consultation to get feedback about your specific situation.***
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California’s Statute of Limitations for SUING to collect old credit card debts is four years
It is true California has a four-year statute of limitations for written contracts.
Most credit card agreements are considered written contracts under California law.
But, the statute of limitations only determines how much time the creditor has to sue you after a cause of action “accrues.”
When does the Statute of Limitations (SOL) start to run in California?
Let’s assume we are talking about credit card debt. When does the statute of limitations start to run?
In California, this clock could start to run on the due date of your first missed payment, assuming you never made a subsequent payment.
It could also be the date of your last purchase using the credit card.
The creditor must sue you within four years of the event that started the SOL clock ticking.
But, once the creditor has a valid judgment, the game changes.
Once a creditor has a valid judgment against you, it is no longer limited by the Statute of Limitations
Once a creditor has a valid judgment against you, the Statute of Limitations no longer comes into play.
Now, you are concerned with how long judgments are valid in California.
***This post doesn’t discuss possible procedural problems with a judgment. The first thing you should do when faced with an unexpected garnishment is check the original court case to see if you have grounds to vacate the judgment.***
Judgments are valid for ten years in California– but they can be renewed
Some states provide that judgments are no longer enforceable after a certain amount of time.
In California, judgments can be renewed every ten years. There is no limit to how often a judgment can be renewed.
But, there is a specific procedure for renewing judgments and sometimes creditors don’t follow the proper procedure.
Sometimes even creditors and their armies of lawyers miss deadlines.
Judgments accumulate interest at 10% per year in California
Judgments in California accumulate interest at 10% per year.
A relatively small judgment can turn into a large one in only a few years’ time.
If you have a judgment against you, it’s best to deal with it immediately.
For some people, this can mean filing bankruptcy.
If the judgment has already been used to start a garnishment, a bankruptcy will stop the garnishment.
The bankruptcy will also discharge the underlying debt (the judgment.)
This means you won’t have to worry about future garnishments, bank account levies, and liens to collect on the judgment.
If you have a garnishment or a judgment against you, give us a call at (805) 284-0760 for a free consultation. We can help you determine if the judgment is valid and your options for stopping the garnishment.