California
California Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession
Independently fact-checked against primary sources (last audited August 12, 2026). · 9 primary sources cited on this page. How we verify our legal content
California has quietly built one of the most protective debt collection frameworks in the country, but none of it matters until you understand the sequence: for ordinary consumer debt, a collector must sue you, win a judgment, and obtain an earnings withholding order through the court before your employer withholds anything. Most garnishments happen because the person sued never answered and a default judgment was entered. Answering the summons is the single highest-value action available to you, and in California an answer also preserves defenses the state hands you, including one of the strongest time-barred-debt statutes anywhere.
Wage Garnishment in California: The 20% / 48x Formula
Since September 1, 2023, when SB 1477 took effect, California Code of Civil Procedure 706.050 caps an earnings withholding order at the lesser of:
- 20 percent of your disposable earnings for the week, or
- 40 percent of the amount by which your weekly disposable earnings exceed 48 times the applicable minimum hourly wage.
Two details make this formula unusually protective. First, the multiple is high: 48 times the state minimum wage of $16.90 per hour in 2026 works out to $811.20 per week, and disposable earnings at or below that level cannot be garnished at all. Second, the statute expressly uses the local minimum wage where the debtor works if it is higher than the state's, so workers in cities like Los Angeles or San Francisco get a higher protected floor still. For other pay periods the statute scales the multiple: 96 hours biweekly, 104 semimonthly, 208 monthly.
Disposable earnings means pay remaining after legally required deductions. The federal 25%/30-times formula still exists underneath, but California's is stricter across the board, so the state formula is the one that governs ordinary judgment garnishments.
Beyond the formula, CCP 706.051 lets you claim an exemption for earnings you can show are necessary for the support of you or your family. It is claim-based, decided by the court on a financial statement, and unavailable against support orders, wage debts, and certain state tax orders. If the formula amount still leaves you unable to cover essentials, this claim of exemption, filed with the levying officer, is the tool.
State tax collection runs on different math
California tax agencies use administrative earnings withholding orders that are not subject to the SB 1477 formula. The CDTFA's published withholding schedule applies a federal-style 25 percent test with the federal $217.50 weekly floor, and the Franchise Tax Board runs its own earnings withholding order program under CCP 706.070 through 706.084. If the levy is for state taxes, expect less protection than the 20%/48x consumer formula provides.
Firing protection
The verified protection is federal: 15 U.S.C. 1674 bars discharge because of garnishment for any one debt. California labor law contains its own garnishment-related discharge provision, but its current scope was not verified for this article, so do not rely on protection beyond the federal one-debt rule without advice.
Bank Account Protections: The Automatic $2,325
California is one of the few states with a genuinely self-executing bank exemption. Under CCP 704.220, money in your deposit account equal to or less than the minimum basic standard of adequate care for a family of four is exempt without making any claim. The figure is indexed annually; effective July 1, 2026 it is $2,325. The protection applies per debtor, not per account, and the bank must preserve the aggregate protected amount across your accounts at that institution. It does not apply to levies for child or spousal support, wage judgments, or certain state agency collections.
On top of that:
- Paid earnings that you can trace into a deposit account retain a partial exemption under CCP 704.070, so a levy that sweeps a just-deposited paycheck can be challenged.
- Directly deposited federal benefits such as Social Security carry the automatic federal shield of 31 CFR Part 212: the bank itself must protect the last two months of benefit deposits before honoring a levy.
Statute of Limitations on Debt in California
| Debt type | Limitations period | Statute |
|---|---|---|
| Written contract (credit cards, loans) | 4 years | CCP 337(a) |
| Book account, account stated, open account | 4 years | CCP 337(b) |
| Oral contract | 2 years | CCP 339 |
| Promissory note | 6 years from the due date | Com. Code 3118 |
Credit card debt is treated in practice as a written contract or book account, either way landing at 4 years from the last payment or charge.
California's time-barred debt rules have real teeth
Two provisions make California stricter on old debt than federal law:
- CCP 337(d): once the 4-year period has run, a person may not bring suit or initiate arbitration or any other legal proceeding to collect the debt. This goes beyond federal Regulation F, 12 CFR 1006.26, which bars debt collectors from suing or threatening suit on time-barred debt; California's bar reaches arbitration and applies as state law.
- CCP 360: an acknowledgment or promise reviving a debt must be in a writing signed by the debtor. A payment can restart the clock while it is still running, but by the statute's own terms no payment can revive a cause of action once it is barred. In California, a small payment on an already time-barred debt does not bring it back.
Time-barred still is not erased: a collector may ask you to pay, and the debt can appear on your credit report for its own roughly seven-year reporting window. But the leverage of a lawsuit is gone, and a collector that sues anyway is violating both CCP 337(d) and Regulation F.
Medical Debt: Extra Limits
California restricts hospital collection practices for lower-income patients: under the Hospital Fair Pricing Act as expanded by AB 1020, hospitals and their assignees are restricted from garnishing the wages of patients eligible for charity care or discounted payment programs, except by court order on a noticed motion. Separately, 2024 legislation (SB 1061) targets medical debt on credit reports, making medical debt that is reported to a credit agency unenforceable, with the regime phasing in from 2025. The precise statutory boundaries of both regimes are technical, so if a hospital bill is behind a garnishment threat, eligibility screening for charity care is worth doing immediately.
What Debt Collectors Can and Cannot Do
The federal FDCPA applies, and California doubles it: the Rosenthal Fair Debt Collection Practices Act extends FDCPA-style prohibitions to original creditors collecting their own consumer debts, not just third-party collectors. Prohibited across the board: misrepresenting the amount or legal status of a debt, threatening action that cannot legally be taken, and harassment, 15 U.S.C. 1692e and its state counterpart. California also requires debt buyers to hold documentation of the debt before suing and licenses debt collectors under the Debt Collection Licensing Act, overseen by the Department of Financial Protection and Innovation, which accepts complaints alongside the CFPB and the Attorney General.
Car Repossession Rules: Rees-Levering
Self-help repossession is legal in California under the state's version of UCC 9-609: after default, the lender may take the vehicle without a court order if it can do so without a breach of the peace. But California layers on the Automobile Sales Finance Act, known as Rees-Levering, which gives repossessed buyers rights most states do not have:
- 15-day notice before disposition. Under Civil Code 2983.2, all persons liable on the contract must receive a written Notice of Intent to Dispose at least 15 days before the vehicle is sold, stating their rights.
- The right to reinstate, not just redeem. Under Civil Code 2983.3, a buyer generally has the right to reinstate the contract by curing the defaults, paying the missed amounts and reasonable fees rather than the entire accelerated balance. Reinstatement is limited to once in any 12-month period and twice over the life of the contract, and the lender can refuse it in enumerated bad-conduct situations such as fraud on the credit application, concealing or removing the vehicle from the state, substantially damaging it, or its use in a crime.
- Deficiency leverage. If the required notices do not comply with the Act, the lender's right to collect a deficiency after sale is barred. Many California deficiency claims die on defective notices, so have the paperwork reviewed before paying a deficiency demand.
- Licensed agents only. Under Business and Professions Code 7502.1, repossessing a vehicle without a repossession agency license, for anyone not exempt, is a misdemeanor punishable by a fine of up to $5,000 and up to one year in county jail.
Servicemembers have an additional federal layer: for contracts entered before military service, the SCRA, 50 U.S.C. 3952, requires a court order before repossession.
If You Are Being Garnished or Sued in California
- Answer the lawsuit. A default judgment converts a collector's allegations into a 10-year renewable judgment with interest. An answer forces proof of the chain of title on the debt, the amount, and timeliness.
- Raise the statute of limitations. Four years runs faster than collectors like; if the last payment or charge is older, CCP 337(d) bars the suit outright, and the defense is waived if not raised.
- Claim your exemptions. File the claim of exemption for earnings needed for support under CCP 706.051, and check whether a bank levy respected the automatic $2,325 under CCP 704.220 and traceable-earnings protection under 704.070.
- Check the garnishment math. Withholding above the 20%/48x formula, especially where a higher local minimum wage applies, is challengeable through the levying officer and the court.
- On a repossession, demand the Rees-Levering notices. Reinstatement rights and deficiency defenses turn on them.
- Consider bankruptcy for unpayable debt. The automatic stay stops garnishments and levies at filing, and California's generous exemptions carry into bankruptcy. For multiple judgments it is often the only complete answer.
Overwhelmed by debt? Get a free bankruptcy consultation
Bankruptcy can stop foreclosure, wage garnishment, and creditor calls, and which debts you can clear and what property you keep depend on your state's exemptions. Get a free, confidential consultation with a bankruptcy attorney to understand your options. There is no obligation.
Information last verified on 2026-08-12. This article has not yet been reviewed by a licensed lawyer.
Related Resources
- Debt Collection Laws by State
- How to Stop Wage Garnishment
- Statute of Limitations on Debt
- Car Repossession Laws
- California Statute of Limitations
- California Bankruptcy Laws
Last updated: 2026-08-12.
More California Laws
Frequently Asked Questions
How much of my paycheck can be garnished in California?
The lesser of 20% of weekly disposable earnings or 40% of the amount above 48 times the applicable minimum wage, under CCP 706.050. At the 2026 state minimum wage of $16.90, disposable earnings up to $811.20 per week are fully protected, and a higher local minimum wage raises that floor further.
Is money in my bank account automatically protected in California?
Yes, up to a point. CCP 704.220 automatically exempts a baseline amount, $2,325 as of July 1, 2026, without any claim being filed, and the bank must apply it. Traceable deposited earnings and two months of directly deposited federal benefits carry additional protection. Amounts above those figures require a claim of exemption.
What is the statute of limitations on credit card debt in California?
Four years under CCP 337, whether analyzed as a written contract or a book account, measured from the last payment or charge. Oral contracts get 2 years.
Can a collector sue me on an old debt in California?
Not lawfully. Once the limitations period has run, CCP 337(d) bars suit and even arbitration on the debt, and federal Regulation F separately prohibits debt collectors from suing or threatening suit on time-barred debt. Collectors may still ask you to pay, and the debt can remain on your credit report for its own reporting period.
Does making a payment revive an old debt in California?
Not once it is time-barred. Under CCP 360, a payment can restart the clock only while it is still running; a payment on an already barred debt does not revive it, and an acknowledgment revives a debt only if made in a signed writing.
Can I get my car back after repossession in California?
Usually yes, if you act within the Rees-Levering window. You must receive a 15-day Notice of Intent to Dispose, and in most cases you have the right to reinstate the contract by paying the missed amounts and fees rather than the full balance, limited to once per 12 months and twice per contract.
Can anyone repossess a car in California?
No. Repossession by an unlicensed person who is not exempt is a misdemeanor under Business and Professions Code 7502.1, carrying a fine of up to $5,000 and up to a year in county jail.
Updates
Independently fact-checked against the cited primary sources
The Law Behind This Article
This article rests on the statutory provisions below, held in our own legal record and retrieved from the official source. Tap a section to read the operative text.
California Civil Code
§ 1788.17In force
Notwithstanding any other provision of this title, every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of, Title 15 of the United States Code. However, subsection (11) of Section 1692e and Section 1692g shall not apply to any person specified in paragraphs (A) and (B) of subsection (6) of Section 1692a of Title 15 of the United States Code or that person’s principal. The references to federal codes in this section refer to those codes as they read January 1, 2001.
Official text (excerpt) · last checked 2026-09-02 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
§ 2983.3In force
(a) (1) In the absence of default in the performance of any of the buyer’s obligations under the contract, the seller or holder may not accelerate the maturity of any part or all of the amount due thereunder or repossess the motor vehicle. (2) Neither the act of filing a petition commencing a case for bankruptcy under Title 11 of the United States Code by the buyer or other individual liable on the contract nor the status of either of those persons as a debtor in bankruptcy constitutes a default in the performance of any of the buyer’s obligations under the contract, and neither may be used as a basis for accelerating the maturity of any part or all of the amount due under the contract or for repossessing the motor vehicle. A provision of a contract that states that the act of filing a petition commencing a case for bankruptcy under Title 11 of the United States Code by the buyer or other individual liable on the contract or the status of either of those persons as a debtor in bankruptcy is a default is void and unenforceable.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
Cited in 13 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Ramirez v. Balboa Thrift etc. (California Court of Appeal 2013)“…instatement as to each individual class member pursuant to Civil Code section 2983.3(b)(1)." During oral argument, R…”
- Fireside Bank v. Superior Court (California Supreme Court 2007, 56 Cal. Rptr. 3d 861)“…ned the repossessor, depriving Gonzalez of any remedy under Civil Code section 2983.3, subdivision (b)(4), and (2) Gonzalez i…”
- Hernandez v. Atlantic Finance Co. of Los Angeles (California Court of Appeal 1980, 105 Cal. App. 3d 65)“…ssession, without acceleration of the total balance owing. (Civ. Code, § 2983.3.) It further provides that the lender i…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
California Code of Civil Procedure
§ 706.050In force
(a) Except as otherwise provided in this chapter, the maximum amount of disposable earnings of an individual judgment debtor for any workweek that is subject to levy under an earnings withholding order shall not exceed the lesser of the following: (1) Twenty percent of the individual’s disposable earnings for that week. (2) Forty percent of the amount by which the individual’s disposable earnings for that week exceed 48 times the state minimum hourly wage in effect at the time the earnings are payable. If a judgment debtor works in a location where the local minimum hourly wage is greater than the state minimum hourly wage, the local minimum hourly wage in effect at the time the earnings are payable shall be used for the calculation made pursuant to this paragraph.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
Cited in 8 court opinions in our collectionLatest citing opinion in our collection: 2024
Opinions citing this section in our collection:
- Sourcecorp, Inc. v. Shill (California Court of Appeal 2012, 206 Cal. App. 4th 1054)“…nings. 2 ( 15 U.S.C. § 1673 (a).) Thus, under the terms of Code of Civil Procedure section 706.050, 75 percent of the disposable earnings…”
- California St. Employees'assn v. State of Calif. (California Court of Appeal 1988, 198 Cal. App. 3d 374)“…n exemptions from earnings which may not be garnished. (See Code Civ. Proc., §§ 706.050-706.052.) The attachment law expressly…”
- Lang v. Superior Court (California Court of Appeal 1984, 153 Cal. App. 3d 510)“…retion in setting the amount has a protective ceiling. (See Code Civ. Proc., § 706.050; 15 U.S.C. §§ 1672-1673 .)…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
§ 704.220In force
(a) Money in the judgment debtor’s deposit account in an amount equal to or less than the minimum basic standard of adequate care for a family of four for Region 1, established by Section 11452 of the Welfare and Institutions Code and as annually adjusted by the State Department of Social Services pursuant to Section 11453 of the Welfare and Institutions Code, is exempt without making a claim. (b) (1) Subdivision (a) does not preclude or reduce a judgment debtor’s right to any other exemption provided by state or federal law.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
§ 337In forcecited in 2 of our articles
Within four years: (a) An action upon any contract, obligation or liability founded upon an instrument in writing, except as provided in Section 336a; provided, that the time within which any action for a money judgment for the balance due upon an obligation for the payment of which a deed of trust or mortgage with power of sale upon real property or any interest therein was given as security, following the exercise of the power of sale in such deed of trust or mortgage, may be brought shall not extend beyond three months after the time of sale under such deed of trust or mortgage. (b) An action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgment of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that if an account stated is based upon an account of one item, the time shall begin to run from the date of the item, and if an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
Cited in 570 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Sun'n Sand, Inc. v. United California Bank (California Supreme Court 1978, 21 Cal. 3d 671)“…he theory of the action is an implied contractual warranty (Code Civ. Proc., § 337, subd. 1)—reflects a reasonable policy…”
- Bollinger v. National Fire Insurance (California Supreme Court 1944, 25 Cal. 2d 399)“…ars as in the case of actions on other written instruments (Code Civ. Proc., § 337). Originally the shortened limitation p…”
- Miller v. Bechtel Corp. (California Supreme Court 1983, 33 Cal. 3d 868)“…ng to the consideration of motions for summary judgment." Code of Civil Procedure sections 337, subdivision 3 and 338, subdivision 4 b…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: California Statute of Limitations: Filing Deadlines by Case Type
§ 360In force
No acknowledgment or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of this title, unless the same is contained in some writing, signed by the party to be charged thereby, provided that any payment on account of principal or interest due on a promissory note made by the party to be charged shall be deemed a sufficient acknowledgment or promise of a continuing contract to stop, from time to time as any such payment is made, the running of the time within which an action may be commenced upon the principal sum or upon any installment of principal or interest due on such note, and to start the running of a new period of time, but no such payment of itself shall revive a cause of action once barred.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
Cited in 47 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Southern Pacific Co. v. Prosser (California Supreme Court 1898, 122 Cal. 413)“…the statute by a new promise or acknowledgment in writing (Code Civ. Proc., sec. 360), but at the same time it was held that…”
- Leonard v. Gallagher (California Court of Appeal 1965, 235 Cal. App. 2d 362)“…lied, which would have revived the statute of limitations. (Code Civ. Proc., § 360.) The point is immaterial. Conceding fo…”
- Kaichen's Metal Mart, Inc. v. Ferro Cast Co. (California Court of Appeal 1995, 33 Cal. App. 4th 8)“…45 Cal.2d 66 , dealt with the construction of former Code of Civil Procedure section 360. The current amended section 360, like…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
California Business and Professions Code
§ 7502.1In force
(a) Any person who violates any provision of this chapter, or who conspires with another person to violate any provision of this chapter, or who knowingly engages a nonexempt unlicensed person to repossess collateral on that person’s behalf is guilty of a misdemeanor, and is punishable by a fine of five thousand dollars ($5,000), or by imprisonment in the county jail for not more than one year, or by both the fine and imprisonment. In addition, any tow vehicle subject to registration under the Vehicle Code that is used to violate any provision of this chapter is subject to removal and impound pursuant to Section 22850 of the Vehicle Code. (b) Within existing resources, the Commissioner of Financial Protection and Innovation and the Director of Motor Vehicles may each designate employees to investigate and report on violations of this chapter by any of the licensees of their respective departments. Those employees may actively cooperate with the bureau in the investigation of those activities.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at leginfo.legislature.ca.gov
Code of Federal Regulations Title 12
§ 1006.26Collection of time-barred debts.In forcecited in 37 of our articles
(a) Definitions. For purposes of this section: (1) Statute of limitations means the period prescribed by applicable law for bringing a legal action against the consumer to collect a debt. (2) Time-barred debt means a debt for which the applicable statute of limitations has expired. (b) Legal actions and threats of legal actions prohibited. A debt collector must not bring or threaten to bring a legal action against a consumer to collect a time-barred debt. This paragraph (b) does not apply to proofs of claim filed in connection with a bankruptcy proceeding.
Official text (excerpt) · last checked 2026-09-02 · Read the full text in our law library · Verify at ecfr.gov
Cited in 3 court opinions in our collectionLatest citing opinion in our collection: 2025
In the courts (editorial summary, independently checked):Hanover v. Real Time Resolutions, Inc. (2024) dismissed FDCPA claims built on 12 CFR 1006.26(b), reasoning it bars only collection of time-barred debts and the loans at issue were not time barred. Raja v. Specialized Loan Servicing, LLC (2025) dismissed a Regulation F claim because nonjudicial foreclosure is not covered by the FDCPA.
Opinions citing this section in our collection:
- Hanover v. Real Time Resolutions, Inc. (District Court, S.D. Ohio 2024)✓A borrower claimed a servicer's letter and billing statement lacked language required by 12 CFR 1006.26(b); the court granted the servicer summary judgment, since the rule only bars collecting time-barred debts and it had already found her HELOC and mortgage enforceable.
- Raja v. Specialized Loan Servicing, LLC (District Court, E.D. Virginia 2025)✓Pro se homeowners alleged a servicer and foreclosure attorneys pursued a time-barred, discharged second mortgage in violation of 12 CFR 1006.26(b); the court dismissed that claim, holding parties carrying out a nonjudicial foreclosure are not FDCPA debt collectors.
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Idaho Debt Collection Laws: Garnishment Limits, Debt Deadlines, and Repossession, Maine Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession, Michigan Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession
United States Code Title 15
§ 1692eFalse or misleading representationsIn forcecited in 10 of our articles
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof. The false representation of— the character, amount, or legal status of any debt; or any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. The false representation or implication that any individual is an attorney or that any communication is from an attorney. The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action. The threat to take any action that cannot legally be taken or that is not intended to be taken.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 3,533 court opinions in our collectionLatest citing opinion in our collection: 2026
In the courts (editorial summary, independently checked):Courts read Section 1692e through the least sophisticated consumer test. Christ Clomon v. Philip D. Jackson (1993) held that mass-mailed letters bearing an attorney signature, sent without file review, violated subsections (3) and (10); Gonzalez v. Kay (2009) held a back-page disclaimer did not defeat the claim on a motion to dismiss.
Opinions citing this section in our collection:
- Miller v. Wolpoff & Abramson, L.L.P. (Court of Appeals for the Second Circuit 2003, 321 F.3d 292)✓Debt letters went out on law firm letterhead after an attorney reviewed only a file showing the debt was outstanding; the Second Circuit held that merely being told by a client that a debt is overdue is not enough attorney involvement, and vacated summary judgment.
- William C. Lewis v. Acb Business Services, Inc., (96-3093/3498), American Express Travel Related Services Company, Inc. James P. Connors, (96-3498) (Court of Appeals for the Sixth Circuit 1998, 135 F.3d 389)✓A collection letter told the debtor to contact 'M. Hall,' a name no employee at the agency actually used; the Sixth Circuit held the alias was not a false or deceptive means under 1692e(10) because the account had been assigned to a real representative and no harm was shown.
- Gonzalez v. Kay (Court of Appeals for the Fifth Circuit 2009, 577 F.3d 600)✓A law firm collecting a $448.97 phone debt sent an unsigned letter on its letterhead with the disclaimer of attorney review only on the back; the Fifth Circuit held the least sophisticated consumer might think a lawyer was involved and reversed dismissal of the 1692e claim.
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Statute of Limitations on Debt: The 50-State Payment-Revival Table, Alabama Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession, Alaska Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession
§ 1674Restriction on discharge from employment by reason of garnishmentIn forcecited in 15 of our articles
No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness. Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 48 court opinions in our collectionLatest citing opinion in our collection: 2022
In the courts (editorial summary, independently checked):Federal appeals courts have held that 15 U.S.C. 1674 gives no private right of action to an employee fired over a garnishment. Smith v. Cotton Brothers Baking Co., Inc. (1980) found no implied civil remedy, and Le Vick v. Skaggs Companies, Inc. (1983) agreed, leaving enforcement to the Secretary of Labor under Section 1676.
Opinions citing this section in our collection:
- James E. Le Vick v. Skaggs Companies, Inc. (Court of Appeals for the Ninth Circuit 1983, 701 F.2d 777)✓An employee fired after his wages were garnished sued his employer under 15 U.S.C. 1674(a); the Ninth Circuit declined to follow its own Stewart precedent and held Congress created no private right of action, leaving enforcement to the Secretary of Labor.
- Hodgson v. Cleveland Municipal Court (District Court, N.D. Ohio 1971, 326 F. Supp. 419)✓The Secretary of Labor argued federal garnishment law preempted Ohio's narrower anti-discharge provision; the court found no showing that 15 U.S.C. 1674, a self-enforcing criminal section, was frustrated by the Ohio statute, and no justiciable controversy under it.
- Reginald O. Wallace v. Debron Corporation (Court of Appeals for the Eighth Circuit 1974, 494 F.2d 674)✓A Black welder was fired under a rule barring two garnishments in a year; reversing summary judgment on his Title VII disparate-impact claim, the Eighth Circuit read 15 U.S.C. 1674 as preventing discharge for one indebtedness, not authorizing it for others.
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Arkansas Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession, Georgia Debt Collection Laws: Garnishment Caps, the 10-Day Repo Notice, and Debt Time Limits, Arizona Debt Collection Laws: The 10% Garnishment Cap, Statute of Limitations, and Repossession
Code of Federal Regulations Title 31
§ 212.3Definitions.In forcecited in 4 of our articles
For the purposes of this part, the following definitions apply. Account means an account, including a master account or sub account, at a financial institution and to which an electronic payment may be directly routed. Account holder means a natural person against whom a garnishment order is issued and whose name appears in a financial institution's records as the direct or beneficial owner of an account. Account review means the process of examining deposits in an account to determine if a benefit agency has deposited a benefit payment into the account during the lookback period. Benefit agency means the Social Security Administration (SSA), the Department of Veterans Affairs (VA), the Office of Personnel Management (OPM), or the Railroad Retirement Board (RRB). Benefit payment means a Federal benefit payment referred to in § 212.2(b) paid by direct deposit to an account with the character “XX” encoded in positions 54 and 55 of the Company Entry Description field and the number “2” encoded in the Originator Status Code field of the Batch Header Record of the direct deposit entry.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at ecfr.gov
Cited in 6 court opinions in our collectionLatest citing opinion in our collection: 2025
Opinions citing this section in our collection:
- Roger Hawes v. William Stephens (Court of Appeals for the Fifth Circuit 2020, 964 F.3d 412)“…Federal or State law to engage in the business of banking.” 31 C.F.R. § 212.3. TDCJ possesses no such charter.…”
- Collect Access LLC v. Hernandez (In Re Hernandez) (United States Bankruptcy Appellate Panel for the Ninth Circuit 2012, 483 B.R. 713)“…exempt funds. [See 31 CFR 24 § 212.1 et seq.; see also 31 CFR § 212.3 (definitions)].” Hon. 25 Alan M. Ahar…”
- Gates v. MCT Group, Inc. (District Court, S.D. California 2015, 93 F. Supp. 3d 1182)“…eral financial regulations from levy or garnishment. See 31 C.F.R. § 212.3 and § 212.5(b) and (c). Because no pay…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Can Social Security Be Garnished? What Section 407 Actually Protects
United States Code Title 50
§ 3952Protection under installment contracts for purchase or leaseIn forcecited in 17 of our articles
After a servicemember enters military service, a contract by the servicemember for— the purchase of real or personal property (including a motor vehicle); or the lease or bailment of such property, may not be rescinded or terminated for a breach of terms of the contract occurring before or during that person’s military service, nor may the property be repossessed for such breach without a court order. This section applies only to a contract for which a deposit or installment has been paid by the servicemember before the servicemember enters military service. A person who knowingly resumes possession of property in violation of subsection (a), or in violation of section 3918 of this title, or who knowingly attempts to do so, shall be fined as provided in title 18, or imprisoned for not more than one year, or both.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 1 court opinions in our collectionLatest citing opinion in our collection: 2025
Opinions citing this section in our collection:
- Ditech Holding Corporation (United States Bankruptcy Court, S.D. New York 2025)“…d on, or sold during or within a year after active service. 50 U.S.C. §§ 3952, 3953. Claimant states that he re…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Louisiana Debt Collection Laws: Prescription, Garnishment, and Repossession, Maryland Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession, Massachusetts Debt Collection Laws: Wage Garnishment, Statute of Limitations, and Repossession
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Sources and References
- California Code of Civil Procedure 706.050, Maximum amount of disposable earnings subject to levy (SB 1477 formula)(leginfo.legislature.ca.gov).gov
- California Code of Civil Procedure 704.220, Automatic exemption for money in a deposit account(leginfo.legislature.ca.gov).gov
- California Code of Civil Procedure 337, Four-year statute of limitations; bar on collecting time-barred debt(leginfo.legislature.ca.gov).gov
- California Code of Civil Procedure 360, Acknowledgment or promise; effect of payment(leginfo.legislature.ca.gov).gov
- California Civil Code 2983.3, Reinstatement of conditional sale contract after repossession (Rees-Levering)(leginfo.legislature.ca.gov).gov
- California Business and Professions Code 7502.1, Unlicensed repossession; misdemeanor penalties(leginfo.legislature.ca.gov).gov
- CDTFA, Earnings Withholding Order for Taxes rates (state tax levy withholding schedule)(cdtfa.ca.gov).gov
- 12 CFR 1006.26, Regulation F prohibition on suits and threats of suit on time-barred debt(ecfr.gov).gov
- 31 CFR Part 212, Garnishment of accounts containing federal benefit payments(ecfr.gov).gov