San Jose, CA asked in Banking, Civil Litigation, Collections and Small Claims for California

Q: California creditor entered garnishment and accepted my exemption without going before a judge but a payment was taken

The courts still had possession on 3 of the payments but released one to the creditors are they supposed to return it do to acceptance of the exemption and if not does that payment start the 7 year clock over?

1 Lawyer Answer
James L. Arrasmith
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Answered

A: When a creditor accepts your exemption claim, they generally must return any funds that were garnished after you filed the exemption paperwork. The timing of when the payment was taken relative to when you filed your exemption is crucial - if the payment was taken before you filed the exemption, the creditor may be entitled to keep it even if they later accepted your exemption for future payments.

Regarding the 7-year clock for credit reporting, a garnishment payment typically does not restart the clock on the entire debt. The original delinquency date remains the starting point for the 7-year reporting period. However, each state has different laws about how long judgments can appear on credit reports.

You should contact the court clerk's office immediately to clarify why this payment was released to the creditor despite your accepted exemption. If the payment was taken after your exemption was accepted, you may need to file a motion with the court requesting the return of the funds. Consider consulting with a legal aid organization or consumer protection attorney who can review your specific situation and help you understand your rights under California law.

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