California Remains A Popular State For Lenders Targeting Short Term Loan Customers
California is one state that getting a unsecured loan is not as difficult as in other states. California is a popular state for unsecured loan lenders, due to the different loan laws in California that make it easier for a lender to decide to take a risk on an unsecured loan. The difference in California versus many other states is that in the state of California, a creditor has several legal means of collecting a debt. In California the primary means of collecting a default debt is that of wage garnishment. California code allows the creditor to obtain a judgment if one defaults on the loan repayment. The creditor than may contact a debtors place of employment and require the employer to deduct a certain portion of the debtors wages each pay period and send the money directly to the creditor. It should be noted however that garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law. The first $217.50 per month a debtor makes is not subject to wage attachment, this allows the debtor something to live on. The creditor in California may take 25% of all disposable income. Disposable income is whatever is left after the first $217.50 per month and all legally required deductions such as Federal and State Taxes, FICA, State Unemployment and Disability Taxes. Voluntary contributions do not count whatsoever and these may be garnished, which include retirement accounts, deductions for medical, dental or vision insurance, or contribution to a Medical Savings Account. While a debtor may consider these vital contributions and wage deductions, under the law in California they are considered non vital, optional and wage garnishment attachable.
Garnishment in California is allowed up to 25% of the debtors wages, allowing the creditor to collect upon the debt fairly quickly, although a judgment must still be sought and decided in the creditors favor. However the process to get a judgment is fairly forward, and in most cases the decision is in favor of the creditor. Once the court approves garnishment, the creditor will be assigned a levying officer or the local sheriff will serve your employer with an EWO or Earnings Withholding Order. The employer has no choice but to comply with the court order to garnish the debtors wages.
Generally creditors in California do not like to go to these lengths to collect a debt however, and most will be more than happy to work out a payment arrangement with the debtor. This saves legal fee’s for both parties, although the creditor can and often will recover the cost of legal proceedings against a debtor. The court can order a debtor to pay any attorney fee’s and reasonable costs associated with the legal proceedings that the creditor had to pursue to collect a legal and fair debt that the debtor skipped out on.
The state of California has other protections for creditors as well. For example they can place a lien on any property you own. If the debtor sells the property or refinances the home, the money owed the creditor will come out of these funds. This applies to any unsecured debt in the state of California. So just because the loan is received without collateral does not mean the creditor in California cannot go after a debtors assets. This makes it easier and safer for lenders to offer loans in California. Most people borrowing money via a loan will never have to worry about debt collection if they repay their debts. The state laws are on the books to prevent people from scamming the loan companies by obtaining loans and never having the intentions to pay the debt back.http://daily-blogger.com/california-remains-a-popular-state-for-lenders-targeting-short-term-loan-customers/miscCalifornia,lending,loans