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AB-233 Wage garnishment: restrictions: student loans.(2013-2014)

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AB233:v96#DOCUMENT

Amended  IN  Senate  June 10, 2013
Amended  IN  Assembly  April 09, 2013
Amended  IN  Assembly  March 21, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 233


Introduced by Assembly Member Wieckowski

February 05, 2013


An act to amend Section 706.121 of, and to add Section Sections 706.053 and 706.130 to, 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 or modify an earnings withholding order issued on or after January July 1, 2014, upon proof by a judgment debtor that it was issued in violation of these provisions 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   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.
 (a) 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). A court shall terminate an earnings withholding
(b) An earnings withholding order issued on or after January July 1, 2014, upon proof by the judgment debtor that the earnings withholding order shall be terminated or modified if it enforces a judgment in violation of this section.
(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.
(d) A judgment creditor is liable to the judgment debtor for all amounts collected by the judgment creditor in violation of this section.

SEC. 2.

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

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.
(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).

(e)

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

(f)

(g) 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).

(g)

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

(h)

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

SEC. 3.

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

706.130.
 (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.