February 10, 2021
Summary: If you're being sued for your debt, you might feel like you're going to lose everything. Find out if the debt collectors can take your car and how to stop them.
Do you live in California and owe a debt to a creditor? If you've been sued for a debt, lost the lawsuit, and the court entered judgment against you, the creditor has several options they can take to settle the debt you owe. Typically, creditors may garnish your wages or other assets as a quick and easy means to pay your debt.
If luck is not on your side and you have a judgment against you, it helps to know if your possessions are at risk. If you want to know if a debt collector can take your car in the state of California, keep reading.
If the original creditor is not suing you, your debt may have been sold to a debt collector responsible for collecting on that debt. A debt collector is a person or a party that usually acts on behalf of your original creditor.
A judgment creditor is a person or a party to whom the debt is owed. If you lose your lawsuit, the court will take inventory of your assets to determine how much you currently have to pay off the debt. To recover the debt, a judgment creditor can take some of the money from your bank account in what is called a bank levy. A bank levy freezes your account before you can withdraw all of your funds and allows the creditor to draw from it to settle the judgment.
If the money you have in the bank is not enough to settle the debt, the creditor may take a part of your paycheck as well. This is commonly referred to as Garnishment. When it comes to your paycheck, 75% of your income (after tax) is protected and can't be taken by the debt collector.
If you received a writ of garnishment, you should consider filing a claim of exemption to keep a portion or even all of your wages from being garnished.
Now to answer, that nagging question in the back of your mind, can a debt collector take my car? The answer is yes. Now, just because a debt collector can take your car doesn't mean they want to. Let's take a close look.
Other than your money in the bank and your salary, a debt collector can also take personal property such as a car to settle a debt. Although a debt collector can take your car, there are some rules.
A judgment creditor usually enlists the local sheriff's department's help to seize personal property or a vehicle to recover the debt. When it comes to a property seizure, a person can protect about $6,075 in personal property. You can also protect no more than $2,300 of your car's equity, while the remaining value will be used to pay the debt. Though a portion of the equity in your vehicle is protected, the remaining equity is up for grabs to the creditor.
Depending on your car's resale value, it may or may not be worth it to the judgment creditor to go this route. The truth is, it may not be worth the hassle to sell your car, especially if it is an older model that doesn't have enough value to move the needle on your debt.
If you have a personal vehicle, a debt collector can legally take your car, sell it, and use the money to settle the debt. There's one crucial thing to keep in mind. If your debt is related to a property like a piece of land or defaulted on a car loan, these possessions can be repossessed to settle the debts.
If for some reason, you are genuinely concerned or have reason to believe that your car can or will be sold as a way to pay off your debt, you may want to consider reaching out to the Creditor to settle your debt. If the Creditor is willing to negotiate and work with you, you may want to work with the Creditor to institute a payment plan. If your car has a considerable amount of equity and you are concerned that it will be sold, it may be in your best interest to determine what other options you have available to settle the debt with the Creditor.
Although a judgment creditor can seize your property and vehicle against the debts you owe, you can protect yourself if you move fast and respond to the lawsuit. A debtor rights attorney can also help you if you are already facing judgment. Know your rights and protect your assets.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
Here's a list of guides for other states.
Being sued by a different debt collector? We're making guides on how to beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.