By: Eric Papp, Esq.
Two Common Exceptions to a Claim of Exemption CCP ' 703.510.
You have done your homework and entered judgment against the defendant. You have obtained a writ and are now seeking to levy their bank account. However, in the mail comes a Notice of Claim of Exemption. On it, the defendant claims two exemptions. The first is under CCP ' 704.060 Personal Property Necessary to and Used in Exercise of Trade, Business or Profession wherein the defendant claims the cash in his bank account is a Atool of his trade, necessary for his day to day business.@ The second is under CCP ' 704.070 Paid Earnings; Earnings Withholding Order: Wage Assignment for Support, wherein 75% of the earnings, if not otherwise subject to previous withholding orders, would be exempt from the levy.
Carefully examine both for your particular defendant. There are exceptions. Importantly, note the following:
Cash in a business account of the debtor does not qualify as an exempt Atool of trade@ under CCP 704.060. (C.F. Nielsen, Inc. v. Stern (1992) 11 Cal App 4th Supp. 22, 25).
Paid earnings exemption does not apply to self-employed debtors under CCP 704.070. (Moses v. DeVersecy (1984) 157 Cal App3d 1071, 1073) (Self employed CPA).
If the exceptions apply, prepare your Notice of Opposition to Claim of Exemption pursuant to CCP ' 703.550 et seq. and collect the money for your client.
Eric Papp is a licensed attorney in both California and Nevada and a licensed Real Estate Broker. Mr. Papp is the principal of the Law Offices of Eric Michael Papp located at 495 East Rincon, Suite 125, Corona, CA 92879. Mr. Papp can be reached at (951) 279-6700
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