Collection Laws & Exemptions

By Mark Cappel May 20, 2013
Man in office | Collection laws
HIGHLIGHTS
  • Find out your state's consumer debt protection laws and exemptions.
  • Review FDCPA rules and collection exemptions for homesteads, autos, bank accounts, and wages.
  • Find links to learn more about your state's rules.

Collection Laws & Exemptions by State

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
State-by-state collection laws. Source: Bills.com
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 $35,300 or $52,925 if elderly or disabled $3,250 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 wildcard 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 $50,000 (can double) $5,000 $5,000 100%
South Dakota   Unlimited $6,000 6k-Auto 75%
Tennessee   $5,000 ($7.5K cpl) $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 pursue 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 from wage garnishment, and is 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 (355)


V. S.
Fairview, OR  |  April 03, 2013
There is a civil judgment against me in the State of Nevada when I used to live there. Although I began to make payments when I was working in Nevada they began to garnish my wages. I did not receive a Writ of Garnishment at anytime. Since then I have moved out of that State. I have not made any payments because I have been unemployed. Is this collection company/law firm in violation of NRS 31.240, NRS 31.295 and/or NRS 31.260 regarding the Writ of Garnishment and notifying me? If so what can I do? I am very frustrated because this debt is not mine, they used altered documents and tactics that made it impossible for me to respond to the courts timely so a judgment was made against me. I consider myself to be a diligent responsible consumer so responding was a top priority for me. The judge ignored my pleas and requests for more time and information like signed contract/agreement and/or signed receipts, actual proof. The judge did not even look at my appeal. I then moved away and have not been bothered by them for over a year BUT something tells me soon they will be trying to find me. Will their judgment be honored in my new State? If so don't I have to be legally notified and given the opportunity to fight/appeal in my new state? I would take it to a higher court in Nevada, that is how serious I am that this debt is not mine but logistically I cannot. What can I do? This company does dirty work and prevails in Nevada Courts. It really is a shame and the court system should be more diligent in protecting the people. However I do find it odd that I have not received anything on this via mail, only one phone call and there is no "judgment" on my credit report just the "charge off" from the credit card company and it has been since 2011. I'm sure the interest and fee's are piling up!
Bills.com
April 04, 2013
I can't give you legal advice, as only an attorney can properly do so, but I will share some thoughts with you.

Given the complex set of facts you presented, including that the judge ignored your arguments, I advise you to speak with a Nevada attorney experienced in civil litigation. He or she can advise you if there are any ground to challenge the existing judgment.

Regarding your other question, if the creditor moves to domesticate the judgment, I believe it will be successful. The North Carolina court is not likely to revisit the facts of the original case.
Brandi K.
Mulberry, FL  |  March 19, 2013
This information is from a pamphlet on The Florida Bar Web site titled Debtors' Rights In Florida: Claiming Your Exemptions From Judgments. If you do not claim the homestead exemption described above, you have the right to claim a personal property exemption of up to $4,000 per person. Unless the judgment creditor has a lien or security interest in the property (for example a furniture loan) you can protect up to $4,000 of your personal belongings. Note that this exemption does not apply to child or spousal support debts.

If you own more than $4,000 worth of personal property, you can choose which property to protect. The personal property can include money held in a bank account.
Norma B.
Lakeview, OR  |  March 17, 2013
I just have a quick question re statute of limitations . I have a debt from a computer that was purchased online in 2001 in Calif. No written contract, no oral agreement, just the online click and buy. I paid minimum payments so of course, almost 10 years later, still paying on it. I was laid off in 2009, stopped paying in May 2010. Over the phone, Dell agreed to give me 12 months hardship to start back up in 2011 making payments. I never heard from Dell again. Statute of limitations would have run out in 2012. In July 2012, I began snow-birding. 6 months Oregon, 6 months Calif. BAM. Started getting collection notices from some group in Utah. I was served on Friday (2 days ago). To appear here in Oregon and the amount was up from $740 left to pay to $2,370. I saw this statute of limitations for the lawsuit. Is that not valid? Or do I have to remain in Calif in our home down there to be "safe" from a lawsuit. I have not acknowledged I owe the debt, nor have I paid on it. I have requested many times in writing, confirmation of the debt. I finally received, about 3 weeks ago, a letter saying, Dell through Capital One. No amounts, nothing. The Summons appears to just be from their office. It even says on it at the bottom of the first page it is from a Collection Agency. I went to the District Court and they have no record of any filing. I'm in a quandry here...scared to take a step for fear that I will cancel out the Calif statute of limitations. The summons they served me has so much wrong information in it like it's just a standard "send this to scare her" thing, and their Summons now has an Oregon address on it for their offices. So odd. Does the Statute of Limitations apply still or do I lose the protection since they are talking to me only when in Oregon now? I don't hide where I am. No reason to. I don't mind paying the $700, but that $2400..WOW. Any thoughts without giving legal advice?
Bills.com
March 18, 2013
The answers to your questions are complex, and beyond the scope of what anyone can answer via e-mail or a Web posting. You're dealing with two state statutes of limitations, which are in conflict with each other, and a question about your residency in either Oregon or California. Also, it is unclear to me if the "summons" you received is valid or an attempt to frighten you into negotiating a settlement.

Regardless of where you happen to be at the moment, take all of the documents you have about this matter to a nearby lawyer who has consumer law or civil litigation experience. He or she will review the "summons" and tell you in a moment whether it's legitimate or fake. Then, he or she will analyze your residency issue, and which statute of limitations apply for this case.
J D.
Waterloo, IA  |  December 03, 2012
You folks do a tremendous service, thank you! I am having a dispute with a former landlord and it is true I do owe him "SOME" money. I am in Iowa. He may win some judgment/garnishment against me and he's not willing to work with me outside the courts and that's fine but I want to protect some of the funds in my bank account. I am okay with him/them taking some in wage garnishment but I am concerned about a freeze on my bank account. It seems more and more notices are not being delivered to debtees and I want my opportunity to go to court to tell my side of the story (faulty sink, mold, etc). In the interim, how can I protect some of the money in my bank account? Is there a way? Thank you!
Bills.com
December 04, 2012
Until there is a judgment against you, your bank account is not at risk. If you are worried that a judgment could come down on you without notice, keep funds in your account to a minimum.

I don't know if you can ensure that you receive notice of any suit against you, but here are two ideas:
  1. Hire an attorney and have the attorney send a letter to the landlord, informing him that you want to work things out but, failing that, that all correspondence should be directed to the attorney.
  2. If it does not make financial sense to engage an attorney, send a letter to the landlord via a means that gives you proof that you sent you the letter. Make it clear that you want to work things out and that you are providing your current address. Save a copy of the letter.

If it turns out that you are sued without notice, go back to the court and request an opportunity to present your side of the story and show them your letter as proof that process was not served properly.

Robert B.
November 15, 2012
I notice that 'Nebraska' has a bank account exemption of $2,500, then it says 'auto' next to it. What exactly does that signify?
Bills.com
November 16, 2012
Nebraska has a $2,500 wildcard exemption, which can be used to exempt funds in a financial account, personal property, and automobiles. The "auto" means this Nebraska exemption covers automobiles, too.

In Nebraska, if you had $1,000 in your checking account, and a vehicle with a fair market value of $1,500, both are exempted entirely. (Nebraska Revised Statute 25-1552)
Meshon H.
Arlington, TX  |  October 30, 2012
can a payday loan lender garnish my wages or go after my bank account if i don't pay back? i live in texas.
Bills.com
October 31, 2012
You mentioned you reside in Texas. See the Bills.com resource Payday Loans & Hot Checks in Texas to learn more about your rights and liabilities as a Texas resident.
Jannie F.
Hermitage, TN  |  October 22, 2012
I have private student loans in which i am trying my best to make the payments but not fully able to make the full monthly amount. My co-signer has been helping me out but not much as she is on SSI and a very little retirement check. I know they could take us both to court and garnish my wages but could they garnish her SSI? I had heard that the only way anyone's SSI/SSD can be garnished is for child support or IRS. I know they can not take my car due to having a lean on the title, and i know they can not take my co-signers house due to having a mortage. But my co-signer did leave the estate to me, my brother, my mother and my uncle in her will; could they take my share of the estate? If so what could they do with just that little of the estate? And i have been told that if they want the entire estate in order to meet the debt that they have to pay my brother, my mother, and my uncle for their portions of the estate, is that true? Could they get the entire estate through them-what all would they have to do in order to proceed with getting the entire estate?
Bills.com
October 22, 2012
Your summary of the Social Security Garnishment Rules is correct. See the link just mentioned to learn more.

I assume your co-signer is still alive. If so, the creditor has no claim to your expected inheritance because the law does not allow claims against something so speculative. Why? The owner of the property could change his or her mind and rewrite the will so that you inherit nothing. Or, you could predecease this person and inherit nothing. Or, this person could spend all of their wealth on endless around-the-world cruises and die penniless with nothing in his or her estate but maxed-out credit card accounts.

You and your co-signer should focus on the here and now. See the Bills.com resource How to Settle a Private Student Loan and Private Student Loan Forgiveness and Discharge a Student Loan to learn if any of the solutions mentioned on these pages may provide relief to you.
A W.
Rainsville, AL  |  October 17, 2012
I owe a bill from March 2009 for a hospital bill. It has gone to a collection agency. What is the Statute of Limitations in Alabama for this?
Bills.com
October 21, 2012
I can't give you legal advice. Only an attorney can properly give legal advice. However, I will share a few thoughts with you.

While a credit card has a 3 year SOL in Alabama, a written contract has a SOL of at least 6 years.
Jessica S.
Virginia Beach, VA  |  October 01, 2012
My fiancé recently received a letter from a collection office indicating he owes over $21k for a vehicle he surrendered in March of 2009. I see there's a 3 year statute of limitations in Virginia; does something like this fall under that statute? Also, if they were to obtain court time (they've referenced that he's got a judgment against him but we've received no court summons and it's not on his credit report), can they access our JOINT checking account? Also, his name is on the deed to the house I hold a mortgage on. Can they levy the equity?
Bills.com
October 03, 2012
When a repossession, voluntary or otherwise, results in a deficiency balance, the lender has the right to collect the deficiency balance from the borrower. When the borrower does not pay the deficiency balance, the lender has a cause of action (a legal reason to file a lawsuit) against the borrower for breach of contract. If the state's statute of limitations for breach of contract is X years, and the lawsuit is filed X+ years after the statute of limitations has run, then the borrower has a defense he or she can raise at trial. If the court believes the borrower's statute of limitations defense, then the court will dismiss the case. In all but two states, the passing of the statute of limitations does not prevent the lender from filing a lawsuit. Consult with a lawyer in your state who has civil litigation experience. He or she will research the judgment issue to learn if any judgments are filed against your fiancé.

You mentioned a judgment. Judgments sometimes appear on credit reports, but credit reports are not a perfect snapshot of a person's financial history. In other words, the fact that no judgment appears on a credit report does not mean no judgment exists. You mentioned not receiving a summons. Under state and federal rules of civil procedure, a defendant must receive notice of a lawsuit. This is drilled into the heads of law school students. However, if the experiences shared by Bills.com readers is any indication, lawyers seem to miss this critical step in practice. If a defendant does not receive notice of a lawsuit, he or she can file a motion to vacate a judgment based on the plaintiff (the lender) not following civil procedure rules.

A judgment-creditor must follow the judgment-debtor's state rules when collecting a judgment. Most states allow account levy, liens on property, and wage garnishment. Joint accounts are not immune from account levy. Generally, I discourage joint accounts because, as your situation illustrates, they create more problems than they solve. My advice? You should abandon the joint account and open your own separate account at the same bank or credit union.

A deed establishes ownership rights. As mentioned above, judgment-creditors have the right to place a lien on a debtor's property. Consult with a lawyer about filing a quit-claim deed to remove the debtor's name from the property, and to better understand your rights regarding the possible judgment.

You mentioned "levying equity" in property. Equity is, in the eyes of the law, a theory. It is not real until the property is sold and cash is sitting in a bank account. To answer your question directly, no, a court will not allow an "equity levy" because it is something that may or may not appear in the future. And, if the recent mortgage meltdown taught us anything, it is that equity can vanish in the blink of an eye.
John F.
Stafford, NJ  |  September 18, 2012
My son has defaulted on NJClass student loans (private) in the amount of $68,000. As a co-signer I have been named in the suit. In the judgement will the collection agency be able to garnish my wife's salary as well as my pension, and foreclose on her car and our home, being that she is not involved in the suit? John F. Stafford Twp. NJ
Bills.com
September 20, 2012
You mentioned New Jersey, which is not a community property state. The general rule is judgment-creditors in common law states have no legal basis to use a judgment they obtain against Spouse A to garnish the wages, levy the accounts, or place liens on the property of Spouse B. Some narrow exceptions apply in medical debt situations, but that does not apply in the case you described.

Beware joint financial accounts and property titled in both of your names. If you and your spouse share, for example, a joint checking account, a judgment-creditor can levy the contents of the account. If your home is titled in both your name and your spouse's name, a judgment-creditor can place a lien on the property.

My advice? Consult with a New Jersey lawyer who has bankruptcy experience. I am not suggesting bankruptcy is the solution to your problem. A New Jersey bankruptcy lawyer will discuss your options for how to protect your spouse's assets should a judgment-creditor pursue you.
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