Collection Laws & Exemptions

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Collection Laws & Exemptions by State

May 24, 2012

Below find consumer protection laws and exemptions by state. See the Bills.com Statute of Limitations on Debt page to find consumer statutes of limitations laws for the 50 US states and the District of Columbia. Use this information as a starting point for your research — it is not legal advice. Consult an attorney for legal advice specific to your situation.

If debt is causing you distress, go to the Bills.com Debt Savings Center to get a no-cost quote from a pre-screened debt resolution service provider.

  Collection Laws & Exemptions
  FDCPA Applies to
Original Creditors		 Homestead Exemption Vehicle Exemption Bank Account Wages
Alabama   $5,000 (can double) None $3,000 75%
Alaska   $70,200 $3,900 $1,820 or $2,860 $456-7161
Arizona   $150,000 $5,000 $150 75%
Arkansas   Unlimited (<1/4 acre) $1,200 $800 or $1250 75%
California Yes $50,0004 $5,000 (2x) $0 75%
Colorado   $30,000 $5,000 None 75%
Connecticut   $75,000 (2x if married) $1,500 $1,000 75%
Delaware   None (if both owe $) None $500 85%5
D.C. Yes Unlimited $2,575 $850 75%
Florida Yes Unlimited $1,000 None 100%2
Georgia   $10,000 (can double) $3,500 (2x) $600 75%
Hawaii Yes $30,000 $2,575 None 80%
Idaho   $50,000 $5,000 $800 75%
Illinois   $15,000 (can double) $1,200 $2,000 85%6
Indiana   $7500 (can double) None $4,000 75%
Iowa Yes Unlimited $5,000 $100 75%3
Kansas   Unlimited $20,000 None 75%
Kentucky   $5,000 $2,500 $1,000 75%
Louisiana   $25,000 None None 75%
Maine   $25,000 (ask) $5,000 $400 75%
Maryland Yes None (if both owe $) $2,500 $3,000 75%
Massachusetts Yes $300,000 $700 $425 75%
Michigan Yes $3,500 None None 75%
Minnesota   $200,000 $3,600 None 75%
Mississippi   $75,000 $10,000 None 75%
Missouri   $8,000 $1,000 $1,250 75%
Montana   $60,000 $2,500 None 75%
Nebraska   $12,500 $2,500 $2,500-Auto 85%
Nevada   $125,000 $4,500 None 75%
New Hampshire Yes $30,000 $4,000 $8,000 75%
New Jersey   None (if both owe $) $1,000 $1,000 90%7
New Mexico Yes $30,000 (may double) $4,000 $2,000 75%
New York Yes Varies by county
See CVP § 5206		 $4,000 $2,5008 90%
North Carolina Yes $10,000 (may double) $1,500 $500 100%
North Dakota   $80,000 $1,200 $7,500 75%
Ohio   $25,000 $3,225 $400 (2x) 75%
Oklahoma   Unlimited $3,000 None 75%
Oregon Yes $25,000 ($30K couple) $1,700 (2x) $400 75%
Pennsylvania Yes None (if both owe $) None $300 100%
Rhode Island   $150,000 $10,000 None 75%
South Carolina Yes $5,000 (can double) $1,200 $1,000 100%
South Dakota   Unlimited $6,000 6k-Auto 75%
Tennessee   $5,000 ($7.5K cpl) $4,000 $4,000 wildcard9 75%
Texas Yes Unlimited Unlimited None 100%
Utah   $20,000 (can double) $2,500 or $3,500 None 75%
Vermont Yes $75,000 (can double) $2,500 $1,100 75%
Virginia   $5,000 (+$500/kid 2x) $2,000 None 75%
Washington   $40,000 $2,500 $200 75%
West Virginia Yes $25,000 (can double) $2,400 $800+ 75%
Wisconsin Yes $40,000 $1,200+ $1,000 75%
Wyoming   $10,000 (can double) $2,400 None 75%
Notes

1. Alaska: $716/wk (head of family) or $456/wk (non-head of family)
2. Florida: 100% (head of family only) or 75% for non-head of household
3. Iowa: 75%, but yearly total limited
4. California: $50k (single), $75k (married), $125K (65 or disabled)
5. Delaware: 85% of disposable
6. Illinois: 85% of gross
7. New Jersey: 90% of gross, unless judgment-debtor earns more that 250% of federal poverty level, then court has discretion to use federal 25% exemption.
8. New York: Account contains directly deposited exempt benefits, including Social Security, SSI, Veterans benefits, disability, pensions, child support, spousal maintenance, workers compensation, unemployment insurance, Public Assistance, Railroad Retirement benefits, and Black Lung benefits. Otherwise, $1,740 on all other accounts. See the New York LawHelp Consortium for more information.
9. Tennessee: Up to $4,000 of any personal property, including a financial account, can be exempted. See Tennessee § 26-2-103 for details.

The amounts listed in the chart’s columns are what is protected from collection, what you will be left with should a collector come after a particular asset or your income. Pay attention to the footnotes, where listed.

FDCPA Applies refers to the Fair Debt Collection Practices Act, which customarily applies to collection agents/debt collectors. In the states indicated, the FDCPA applies to original creditors, too.

The Homestead Exemption shows the amount of equity in your primary residence that even a judgment-creditors cannot pursue. The exact amount you can protect depends on the exemption in your state of residence. Some states have no exemption whatsoever. Some states have unlimited exemptions, where all the equity in an expensive mansion is completely protected.

The Vehicle Exemption protects equity in one vehicle up to the amount listed for your state. If you owe money on the vehicle, subtract what you owe from what it is worth, to see if your vehicle is totally exempt or not. In some states, a vehicle that is worth more than the exempt amount can be seized and sold, with the exempt amount returned to the owner.

The Bank Account Exemption lists how much is safe from a judgment-creditor’s collection efforts. Some states offer no protections; anything in your account can be levied.

The Wage Exemption shows what part of your wages are protected, the amount that most creditors cannot pursue.

Although we believe this information to be accurate as of the date of its posting, we cannot guarantee the accuracy of the information provided. Consult with an attorney in your state for specific information regarding the laws and exemptions that apply to you in your circumstances.

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Comments (323)


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John C.
Lake City, FL  |  February 26, 2012
My ex-wife has a judgement against her for a Credit Card debt, and they are garnishing her wages. She lives in Kentucky. She told me today that they are charging her 14.9% interest on the judgement. I did not think that was allowed - is it?
Avatar
Bills.com
February 26, 2012
Here is link to Section 360.040 of Kentucky Revised Statutes. It states the standard interest rate is 12%, though it can be higher in some cases.

I suggest your ex-spouse speak with a lawyer in Kentucky to see if she is being charged more than allowed.
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Julieu C.
Murrieta, CA  |  February 26, 2012
Can my pre visa debit card be garnished w a levy if there Is a recent judgement against me? I live In CA. Also, if I start the bankruptcy process will it eliminate the levy on me until bankruptcy is complete or at least freeze it?
Avatar
Bills.com
February 26, 2012
If I had a judgment against me, I would act as if my pre-paid VISA card could be levied, as I would for any account that holds my funds and is tied to my social security number.

Once your bankruptcy is formally started, all collections against you are put on hold.
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Susan M.
Brentwood, TN  |  February 17, 2012
We lost hundreds of thousands in recent years due to declined values and failed rental house investments, Rather than go bankrupt a few years ago, we rolled that business-related debt into our personal home maxing out equity as well as continuing to max personal credit cards to carry negative cash flow for years...waiting on upside down properties to sell, etc. We refinanced our home to get cash to personally fund short sales and depleted all savings, and now are trying to sell our home as well because of the heavy debt load. We have never missed a payment at all but made them using credit to protect credit score - hoping things would sell with at least some net proceeds and we would be able to honor/payoff debts. I thought keeping our credit score in the 700s, as it currently is, was critical...but I'm learning it has become less important with the masses defaulting. Our $70K credit limit has maxed out again (with no equity left to consolidate it) and now time has run out so we are looking at debt relief options, bankruptcy or whatever is least harmful for least amount of time. It appears "settling" with one of us taking the fall (rather than spouse also) may work best so we can hopefully retain some creditworthiness on one of us and rebuy if/when our home sells. My question is, once we start the default process (probably with legal counsel help), will a liability umbrella insurance policy help protect us from judgements at all? Also, I heard that a chapter 13 would protect 25% of your equity per filer (50% if joint) so wondered if that was the same if a credit card settlement-related lien was filed against equity? Believe me, if we could have sold it to pay off debts we would have done so by now!
Avatar
Bills.com
February 22, 2012
I agree that it is wise to seek legal counsel for your situation. If your debts are jointly held, then I don't see how you can arrange for one of you to "take the fall."

How much equity can be protected in a bankruptcy depends on the homestead exemption laws in your state. Speak to a bankruptcy attorney to find out how you will be affected and what form of bankruptcy suits your circumstances.
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Linda W.
Sedona, AZ  |  February 17, 2012
We did a promissory note with Bank One with annual interest. They sold it to Collegiate Trust/AES who never told us but they compound interest daily. My husband and I only have social security and own nothing. Can their collection agency put a judgment against us since we only receive social security? I know that SS is suppose to be safe and no one but the Federal Government can garnish it. A pro bono attorney wrote them a letter explaining we have no assets & only receive SS but the collection agency has still called us. I sent them the letter as well. 2. Are there consequences if you move and leave no forwarding address?
Avatar
Bills.com
February 17, 2012
Please see the Bills.com resource Social Security Garnishment to learn general information about the subject you raised in your first question. Regarding the forwarding address question, I know of few instances where a person is required by law to notify another party of their current address. One is that males over age 18 must notify the Selective Service of their current address. The IRS may require a current address by law. Parole agents need parolees' addresses, too. Readers, I welcome your suggestions on any other legal requirements for current address.
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Jan H.
Indian Trail, NC  |  February 15, 2012
How much does a credit card have to be before they put a lien on property as I have some credit cards But have still been paying but my husband moved out and Iam on fixed income
Avatar
Bills.com
February 16, 2012
There are no set limits. If a small debt results in a judgment against you, the lender can pursue a lien against you. The only way to avoid a lien with certainty is to avoid a judgment.
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Mistr R.
New Castle, DE  |  February 09, 2012
I have a couple of judgments totaling about 30K. I started paying them down via wage garnishment but have since become disabled. Is there any relief for a disabled person with judgments?
Avatar
Bills.com
February 09, 2012
I know of no law, plan, program, or exemption that stops or mitigates judgments against people with disabilities. Readers? If you know of any such exemptions, please share your information in the comments below.
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John W.
January 30, 2012
My wife had a joint credit card from a previous marriage dating back 16 years. 3 years ago the wifes wages were garnished and we took it to court as the ex-husband had continued to use said credit card and has ran up over $32000. The ex-husband had to pay all the fees as well as the amount that was garnished. Today we recieve a collection letter stated that we owe the $32,000 still. What can be done about this and why isnt he being held responsible for the card that was to be taken out of the wifes name at the divorce? IS there anything that can be done to stop this from contining to happen to the wife. Its been 16 years since the divirce from her Ex Husband.
Avatar
Bills.com
January 31, 2012
First, validate the debt. Second, ask your lawyer to draft a letter to the collection agent that explains the circumstances briefly. Explain that this matter was subject to litigation, and that the party who takes responsibility for the debt is the ex-husband. There may be an estoppel issue here, which you should discuss with your lawyer. My guess is there is no estoppel issue, and therefore the letter will not persuade a persistent collection agent to cease contacting the ex-wife. However, a letter will put the collection agent on notice that it is kicking a hornet's nest, and it may wish to focus its attention elsewhere.

If the ex-husband continues to ignore the debt, and a collection agent files an action against the ex-wife, consult with a lawyer immediately.
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Tina J.
Salisbury, MD  |  January 28, 2012
I live in Maryland and my checking account has been frozen this week. With five kids and living paycheck to paycheck, this is putting me over the edge. I have spoken to the law office because up until August, I was making monthly payments. Something in their files changed, according to a law clerk, and all of a sudden my checks were returned by the bank. According to my bank, I have proof, these checks have never hit my account. Now, the law office is not willing to fix the problem until an answer is filed with the court, law office and myself. With my bank, this can take 28 days. I also have had my MD state tax check and federal taxes deposited in this account. Is this legal? Can they take everything I have. Also, the garnishment is for 3600 and the bank keeps taking any extra that is put into the account, and placing into their account. According to what I jsut read, 3000 is protected in my account from being confiscated. Any help would be appreciated.
Avatar
Bills.com
January 29, 2012
A bank levy will freeze the non-exempted sums in the account at the time of the levy. It is possible for bank levies to be issued multiple timees. You should be careful about depositing funds in the account, if you suspect that a bank levy will be placed on that account. Your tax refund checks would be subject to the bank levy if they are in your account when the levy hits the account.

I recommend that you put together your bank statements and any documents relating to the court judgment and see a lawyer. If you cannot afford a lawyer call your county bar association and ask for the names of the organizations that provide no-cost legal services to people with low or no income in your area. Make an appointment with one of the organizations, and bring all of the documents and letters you have regarding the debt to your meeting. The lawyer you meet will advise you accordingly.
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JILL M.
Spencerville, OH  |  January 26, 2012
Help, I live in Ohio and have a judgement against me since 2006. I know the company has placed a lien on my home, but I own rental properties also. My question is can 1 company place more then 1 lien for 1 judgement? Thx so much for any info!
Avatar
Bills.com
January 27, 2012
I believe that the lien against you will encumber any real estate that you own, not just against your home. Check with an Ohio real estate attorney to get an answer that constitutes legal advice.
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Harry B.
Angelica, NY  |  January 25, 2012
can i as a creditor have more than one collection agency work on the same account at the same time?
Avatar
Bills.com
January 25, 2012
I am not aware of any state or federal law prohibiting what you suggest. However, I would be surprised if any contract you signed with a collection agency would not have a clause stating it has the exclusive right to collect the debt. If you sell the collection account to a collection agency, your assignment will definitely contain an exclusivity clause.
Avatar
Bills.com
January 26, 2012
Nope, a creditor cannot properly have two agencies collecting a debt on its behalf. Because Bills.com readers are most interested in how your question affects the consumer, I am going to expand on that area.

Typically, when this happens it’s a case where either the issuer is still collecting and, at the same time, have outsourced it to a third party OR they accidentally outsourced it twice.

When files are exchanged on this large a scale (large amounts of delinquent accounts each month with the credit issuer) the issuers put in parameters that trigger the accounts to move back and forth between their internal collections and their third parties.

The problem typically surfaces when an account is marked as "ptp" ("potential to pay" or "promise to pay") by the collector. An account could be marked this way for several reasons, including due to having just talked to the debtor. Marking this account "PTP" secures it off the dialer and in that collector's queue. However, another trigger occurs when there is no payment on an account for 30 or more days. This conflicts with the dialer’s PTP mark and could potentially have the account simultaneously stay with the collector AND move to another 3rd party.

The best scenario is for the client to call the issuer (the bank that backs their credit card) and let them know that two different entities are collecting on the account. The more information (creditor/phone number/collector info, etc) they can provide the better. The issuer is responsible for sorting this out. However, they will be in no hurry to fix this so the debtor needs to be patient.

If the calls become too much, the debtor needs to tell the collector calling "this is my WORK phone or CELL phone and I am telling you not to call this number" and then hang up. The FDCPA mandates that no collection calls can continue to either a cell phone (charges could accrue) or work phone (potential inhibitor of work/earnings) once the debtor has identified that number as such.
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