What Property is Exempt from Seizure to Pay Debt? When you cannot pay an unsecured debt and a creditor or debt collection agency is threatening to sue you, what do you do? All states have laws that exempt certain income and property from being seized or attached by a creditor or debt collector. For example, those who live solely on social security (or have a very limited income) can defend a creditor lawsuit by proving to the judge in court that their social security check is their only source of income and cannot be taken by creditors. There is a good chance that the debt might be dismissed altogether in this situation and without filing bankruptcy. How do you keep a creditor from taking your income and property you have? Find out what property you can declare exempt in your state, and when you are sued and you go to court, tell the judge that you want any exempt income and property declared legally exempt. Make sure that you do not say or sign anything that waives your property exemption rights. IT IS YOUR RESPONSIBILITY TO TELL THE JUDGE THAT YOU WANT CERTAIN PROPERTY DECLARED EXEMPT. DO NOT WAIT FOR THE JUDGE TO ASK YOU, AS SHE / HE MIGHT NOT EVER ASK YOU. The creditor or collection agency who is suing you will likely try to get you to sign a repayment plan. Do not agree to a repayment agreement that you cannot afford, and make very sure that the agreement you sign does not include a clause where you waive your right to have your income and property exempt from creditors as your state provides. If you can only afford $15 a month, then tell the judge this -- in fact, prove it to him by bringing as many records of your living expenses to court with you, including utility bills and grocery receipts, as you can. DO NOT SIGN A REPAYMENT PLAN AND THEN DEFAULT ON IT. IF YOU CANNOT AFFORD TO PAY THE DEBT, TELL THE JUDGE THIS AND DON'T AGREE TO REPAY IT. What property is exempt from creditors and debt collectors in your state? In summary, all states exempt income under a certain amount in order to protect those with low incomes from excessive wage garnishment. For example, your state might have legislation on the books that says a creditor can only seize any net income over $250.00 per week. If you make $250 or less per week, your income is exempt. Your state might put a cap on how much of your wages can be garnished, perhaps no more than 15 percent of your total net wages can be seized. In addition, your state might have declared that government benefits, such as social security, welfare, unemployment compensation and veteran's benefits are entirely exempt from creditors and collection agencies. Your state might also have exempted other retirement benefits (pensions), child support, worker's compensation, life insurance policies, and personal injury awards. Your state might offer you a homestead exemption that protects all or a portion of the equity in your home from creditors. The cash you have in the bank might be protected, as is your car and other assets, such as your clothing, furniture, work tools and a vehicle. A list of exempt property for all 50 states and Washington, D.C. is included in our debt kit. See also: Debt Kit -- Settle unsecured debt for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills by $200+ |
Debt > Property Exempt from Seizure |
Debt > Property Exempt from Seizure |
What Property is Exempt from Seizure to Pay Debt? When you cannot pay an unsecured debt and a creditor or debt collection agency is threatening to sue you, what do you do? All states have laws that exempt certain income and property from being seized or attached by a creditor or debt collector. For example, those who live solely on social security (or have a very limited income) can defend a creditor lawsuit by proving to the judge in court that their social security check is their only source of income and cannot be taken by creditors. There is a good chance that the debt might be dismissed altogether in this situation and without filing bankruptcy. How do you keep a creditor from taking your income and property you have? Find out what property you can declare exempt in your state, and when you are sued and you go to court, tell the judge that you want any exempt income and property declared legally exempt. Make sure that you do not say or sign anything that waives your property exemption rights. IT IS YOUR RESPONSIBILITY TO TELL THE JUDGE THAT YOU WANT CERTAIN PROPERTY DECLARED EXEMPT. DO NOT WAIT FOR THE JUDGE TO ASK YOU, AS SHE / HE MIGHT NOT EVER ASK YOU. The creditor or collection agency who is suing you will likely try to get you to sign a repayment plan. Do not agree to a repayment agreement that you cannot afford, and make very sure that the agreement you sign does not include a clause where you waive your right to have your income and property exempt from creditors as your state provides. If you can only afford $15 a month, then tell the judge this -- in fact, prove it to him by bringing as many records of your living expenses to court with you, including utility bills and grocery receipts, as you can. DO NOT SIGN A REPAYMENT PLAN AND THEN DEFAULT ON IT. IF YOU CANNOT AFFORD TO PAY THE DEBT, TELL THE JUDGE THIS AND DON'T AGREE TO REPAY IT. What property is exempt from creditors and debt collectors in your state? In summary, all states exempt income under a certain amount in order to protect those with low incomes from excessive wage garnishment. For example, your state might have legislation on the books that says a creditor can only seize any net income over $250.00 per week. If you make $250 or less per week, your income is exempt. Your state might put a cap on how much of your wages can be garnished, perhaps no more than 15 percent of your total net wages can be seized. In addition, your state might have declared that government benefits, such as social security, welfare, unemployment compensation and veteran's benefits are entirely exempt from creditors and collection agencies. Your state might also have exempted other retirement benefits (pensions), child support, worker's compensation, life insurance policies, and personal injury awards. Your state might offer you a homestead exemption that protects all or a portion of the equity in your home from creditors. The cash you have in the bank might be protected, as is your car and other assets, such as your clothing, furniture, work tools and a vehicle. A list of exempt property for all 50 states and Washington, D.C. is included in our debt kit. See also: Debt Kit -- Settle unsecured debt for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills by $200+ |
