Amended in Senate June 10, 2013

Amended in Assembly April 9, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 233

Introduced by Assembly Member Wieckowski

February 5, 2013

An act to begin insert amend Section 706.121 of, and to end insert add begin delete Section end delete begin insert Sections end insert 706.053 begin insert and 706.130 end insert to begin insert , end insert the Code of Civil Procedure, relating to wage garnishment.

LEGISLATIVE COUNSEL’S DIGEST

AB 233, as amended, Wieckowski. Wage garnishment: restrictions: student loans.

The Wage Garnishment Law prescribes the procedure for withholding an employee’s earnings for purposes of paying a debt. The law requires that a levy of execution upon the earnings of an employee be made by service of an earnings withholding order upon the employer. An earnings withholding order is issued by a levying officer upon receiving an application submitted by a judgment creditor, as specified. An employer is required, except as otherwise provided by statute, to withhold the amounts required by an earnings withholding order from all earnings of the employee payable for any pay period of the employee which ends during the withholding period.

This bill would provide that an earnings withholding order shall not be used for purposes of enforcing a judgment for the collection of debt that is from a student loan that is not made, insured, or guaranteed by the United State Government pursuant to the Federal Family Education Loan Program or the William D. Ford Federal Direct Loan Program. The bill would require a court to terminate begin insert or modify end insert an earnings withholding order issued on or after begin delete January end delete begin insert July end insert 1, 2014, begin delete upon proof by a judgment debtor that it was issued in violation of these provisions end delete begin insert if the court determines, upon a request by the judgment debtor pursuant to specified requirements and procedures, that the withholding order enforces a judgment in violation of these provisions. The bill would provide that a judgment creditor is liable to the judgment debtor for all amounts collected by the judgment creditor in violation of these provisions. The bill also would make conforming changes end insert .

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 706.053 is added to the Code of Civil
Procedure, immediately after Section 706.052, to read:

706.053.  

begin insert (a) end insert begin insert   end insert An earnings withholding order shall not be used
for purposes of enforcing a judgment for the collection of debt that
the judgment debtor proves is from a student loan that is not made,
insured, or guaranteed by the United States Government pursuant
to the Federal Family Education Loan Program (20 U.S.C. Sec.
1071 et seq.) or the William D. Ford Federal Direct Loan Program
(34 C.F.R. 685.100). begin delete A court shall terminate an earnings
withholding end delete

begin insert (b) end insert begin insert   end insert begin insert An earnings withholding end insert order issued on or after begin delete January end delete
begin insert July end insert 1, 2014, begin delete upon proof by the judgment debtor that the earnings
withholding order end delete begin insert shall be terminated or modified if it end insert enforces a
judgment in violation of this section.

begin insert

(c) A judgment debtor may make a request to terminate an
earnings withholding order enforcing a judgment for student loan
debt pursuant to Section 706.130.

end insert begin insert

(d) A judgment creditor is liable to the judgment debtor for all
amounts collected by the judgment creditor in violation of this
section.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 706.121 of the end insert begin insert Code of Civil Procedure end insert begin insert is
amended to read: end insert

706.121.  

The “application for issuance of earnings withholding
order” shall be executed under oath and shall include all of the
following:

(a) The name, the last known address, and, if known, the social
security number of the judgment debtor.

(b) The name and address of the judgment creditor.

(c) The court where the judgment was entered and the date the
judgment was entered.

(d) Whether the judgment is based in whole or in part on a claim
for elder or dependent adult financial abuse and, if in part, how
much of the judgment arises from that claim.

begin insert

(e) Commencing July 1, 2014, whether the judgment is based
in whole or in part on a claim for debt from a student loan that is
not made, insured, or guaranteed by the United States Government
pursuant to the Federal Family Education Loan Program (20
U.S.C. Sec. 1071 et seq.) or the William D. Ford Federal Direct
Loan Program (34 C.F.R. 685.100).

end insert begin delete

(e)

end delete

begin insert (f) end insert  The date of issuance of a writ of execution to the county
where the earnings withholding order is sought.

begin delete

(f)

end delete

begin insert (g) end insert  The total amount required to satisfy the order on the date of
issuance (which may not exceed the amount required to satisfy the
writ of execution on the date of issuance of the order plus the
levying officer’s statutory fee for service of the order).

begin delete

(g)

end delete

begin insert (h) end insert  The name and address of the employer to whom the order
will be directed.

begin delete

(h)

end delete

begin insert (i) end insert  The name and address of the person to whom the withheld
money is to be paid by the levying officer.

begin insert

begin insert SEC. 3. end insert   

Section 706.130 is added to the Code of Civil
Procedure, immediately after Section 706.129, to read:

begin insert 706.130. end insert   

(a) The “request to terminate an earnings
withholding order enforcing a judgment for student loan debt”
shall include all of the following information, if known:

(1) The current mailing address of the judgment debtor.

(2) The name and address of the judgment creditor.

(3) The court in which the judgment was entered and the date
the judgment was entered.

(4) A statement, under penalty of perjury, of whether the
judgment is based in whole or in part on a claim for a student loan
that is not made, insured, or guaranteed by the United States
Government pursuant to the Federal Family Education Loan
Program (20 U.S.C. Sec. 1071 et seq.) or the William D. Ford
Federal Direct Loan Program (34 C.F.R. 685.100). Documents
supporting the existence of the student loan debt shall be attached
to the request.

(5) Whether an earnings withholding order was issued in
violation of Section 706.053. A copy of the order shall be attached
to the request.

(6) The date of issuance of a writ of execution to the county
where the earnings withholding order is sought.

(7) The total amount required to satisfy the earnings withholding
order on the date of issuance.

(8) The name and address of the employer to whom the earnings
withholding order was directed.

(9) The name and address of the person to whom the order
directs the levying officer to pay the money withheld.

(b) A request to terminate an earnings withholding order
enforcing a judgment for student loan debt shall be made by filing
with the levying officer an original and one copy of the request.

(c) Upon filing of a request, the levying officer shall promptly
send to the judgment creditor, at the address stated in the
application for the earnings withholding order, by first-class mail,
postage prepaid, both of the following:

(1) A copy of the request.

(2) A notice of the request. The notice shall state that the request
has been filed and that the earnings withholding order will be
terminated or modified to subtract from the amount to be withheld
the portion that is based on a judgment to collect a student loan
debt in violation of Section 706.053, unless a notice of opposition
to the request is filed with the levying officer by the judgment
creditor within 10 days after the date of the mailing of the notice
of the request.

(d) A judgment creditor who desires to contest a request to
terminate an earnings withholding order enforcing a judgment for
student loan debt shall, within 10 days after the date of the mailing
of the notice of the request, file with the levying officer a notice of
opposition to the request.

(e) If a notice of opposition to a request is filed with the levying
officer within the 10-day period, the judgment creditor is entitled
to a hearing on the request. If the judgment creditor desires a
hearing on the request, the judgment creditor shall file a notice of
motion for an order determining the request with the court within
10 days after the date the levying officer mailed the notice of claim
of exemption. If the notice of motion is so filed, the hearing on the
motion shall be held not later than 30 days from the date the notice
of motion was filed unless the hearing is continued by the court
for good cause. At the time prescribed by subdivision (b) of Section
1005, the judgment creditor shall give written notice of the hearing
to the levying officer and shall serve a notice of the hearing and
a copy of the notice of opposition to the request on the judgment
debtor and, if indicated in the request, on the attorney for the
judgment debtor. Service is deemed made when the notice of the
hearing and a copy of the notice of opposition to the request are
deposited in the mail, postage prepaid, addressed to the judgment
debtor at the address stated in the request and, if service on the
attorney for the judgment debtor was indicated in the request, to
the attorney at the address stated in the request. The judgment
creditor shall file proof of the service with the court. After receiving
the notice of the hearing and before the date set for the hearing,
the levying officer shall file the request and the notice of opposition
to the request with the court.

(f) If the levying officer does not receive a notice of opposition
to the request within the 10-day period after the date of mailing
of the notice of request and a notice of the hearing not later than
10 days after the filing of the notice of opposition to the request,
the levying officer shall serve on the employer one of the following:

(1) A notice that the earnings withholding order has been
terminated if the entire amount to be withheld under the order is
based on a judgment to collect a student loan debt in violation of
Section 706.053.

(2) A modified earnings withholding order that reflects the
subtraction from the amount to be withheld of the portion that is
based on a judgment to collect a student loan debt in violation of
Section 706.053.

(g) If, after hearing, the court orders that the earnings
withholding order be terminated or modified, the clerk shall
promptly transmit a certified copy of the order to the levying officer
who shall promptly serve on the employer of the judgment debtor
(1) a notice that the earnings withholding order has been
terminated, or (2) a copy of the modified earnings withholding
order. The court may order that the earnings withholding order
be terminated as of a date that precedes the date of hearing. If the
court determines that an amount withheld pursuant to the earnings
withholding order should be paid to the judgment debtor, the court
shall make an order directing the person who holds that amount
to pay it promptly to the judgment debtor.

(h) If the earnings withholding order is terminated or modified,
the judgment creditor shall not apply for another earnings
withholding order to enforce the same judgment or the portion
thereof that was determined to be based on a student loan debt in
violation of Section 706.053.

(i) If an employer has withheld and paid over amounts pursuant
to an earnings withholding order after the date of termination of
the order but prior to the receipt of notice of its termination, the
judgment debtor may recover those amounts only from the levying
officer if the levying officer still holds those amounts or, if those
amounts have been paid over to the judgment creditor, from the
judgment creditor. If the employer has withheld amounts pursuant
to an earnings withholding order after termination of the order
but has not paid over those amounts to the levying officer, the
employer shall promptly pay those amounts to the judgment debtor.

(j) An appeal lies from any court order under this section
granting or denying a request to terminate an earnings withholding
order enforcing a judgment for student loan debt. An appeal by
the judgment creditor from an order modifying or terminating the
earnings withholding order shall not stay the order from which
the appeal is taken. Notwithstanding the appeal, until the order
modifying or terminating the earnings withholding order is set
aside or modified on appeal, the order modifying or terminating
the earnings withholding order shall be given the same effect as
if the appeal had not been taken.

(k) This section does not apply to a withholding order for
support or a withholding order for taxes.

end insert