A judgment converts a disputed debt into a court order the creditor can enforce with garnishments, levies, and liens — and in California it generally accrues 10 percent annual simple interest (5 percent for certain medical- or personal-debt judgments under $50,000 entered on or after January 1, 2023) and is usually renewable, so waiting rarely helps. But entry of judgment is not the end of your options. Depending on how the judgment was entered and what you own, you may be able to vacate it, appeal it, shield your income and property, or settle it for less. Here is the map.
First, understand what the creditor can now do
With a judgment, the creditor can apply for a wage garnishment (generally up to 20 percent of disposable earnings in California, with a formula that protects lower incomes), levy your bank accounts, record an abstract of judgment creating a lien on your real property, and summon you to a debtor's examination to answer questions about your assets under oath. Most judgments earn 10 percent simple interest per year, although the rate is 5 percent for certain qualifying medical- or personal-debt judgments under $50,000 entered on or after January 1, 2023. Most judgments can be renewed before their 10-year term expires. None of this is instantaneous — each remedy requires paperwork and lead time — which is exactly the window in which to act.
Protect your money: exemptions
California exemption law places significant property beyond a judgment creditor's reach:
- Automatic bank account protection. Code of Civil Procedure § 704.220 automatically exempts an amount in your deposit accounts equal to the state's "minimum basic standard of adequate care" for a family of four — adjusted annually, and a little over $2,000 — without your filing anything. The bank must leave that amount untouched when a levy hits.
- Claimed exemptions. Beyond the automatic floor, CCP § 703.510 and following set the procedure for claiming exemptions after a levy — including exempt public benefits, Social Security, retirement funds, a vehicle allowance, tools of the trade, and wages needed for the support of you and your family. The deadlines are short (generally 15 days from notice, longer if served by mail), so respond immediately when you receive a Notice of Levy.
- Homestead. California's homestead exemption protects home equity in an amount tied to countywide median home prices, within statutory minimum and maximum figures adjusted annually — substantial protection in most counties.
Exemptions are not automatic forgiveness — the judgment survives — but they determine what the creditor can actually take, which drives every settlement conversation.
Vacating a default judgment
Many collection judgments are defaults entered against people who never knew they were sued. California gives you two main routes to set one aside:
- CCP § 473(b) — mistake, inadvertence, surprise, or excusable neglect. You must move within a reasonable time, and no later than six months after entry.
- CCP § 473.5 — no actual notice. If service did not result in actual notice in time to defend, you may move within a reasonable time, but no later than two years after entry of judgment (or 180 days after written notice that judgment was entered, whichever is earlier). "Sewer service" — a process server who never actually served you — is a recurring problem in debt cases, and a judgment based on fraudulent or void service can be attacked even beyond these windows.
If the motion is granted, the judgment is set aside and the case reopens — where defenses like the statute of limitations, lack of documentation, or mistaken identity come back into play; depending on the circumstances, related debt validation rights may also be relevant. Enforcement generally stops while the case is redecided.
Appeal — a narrow, deadline-driven option
If you litigated and lost, an appeal challenges legal error, not just an unwelcome outcome. Deadlines are strict and jurisdictional — as short as 30 days from notice of entry in limited civil cases and 60 days in most unlimited civil cases — and an appeal does not automatically stop enforcement without a bond or other stay. Appeals make sense for genuine legal error with money at stake; for most collection judgments, the vacate-or-settle routes are more practical.
Settling after judgment
Judgment creditors settle constantly, because enforcement is slow and debtors with exempt income are expensive to collect from. A lump-sum offer, realistically framed by what the creditor could actually reach, often resolves a judgment for meaningfully less than face value. Two non-negotiables: get the deal in writing before paying, and require the creditor to file an Acknowledgment of Satisfaction of Judgment (CCP § 724.010 and following require it once the judgment is satisfied) so the judgment is formally cleared and any liens are released. If you are negotiating while a garnishment or levy is pending, counsel experienced in judgment defense and civil litigation can seek an enforcement pause as part of the deal.
Talk to a California business attorney
The right move after a judgment — vacate, exempt, appeal, or settle — depends on how it was entered and what is at risk, and a free consultation can sort that out quickly. Schedule a free consultation or call (949) 418-2113.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. The law changes, and this article reflects the law as of its publication date. Every situation is different — contact us to discuss how the law applies to your exact circumstances. See our full disclaimer.
