Property a Judgement Creditor Cannot Take
September 22, 2017
There are a number of assets and sources of income that a creditor cannot seize in a civil proceeding. These exempt assets make it possible for debtors to get back on their feet following a period of financial distress.
Exempt Sources of Income
Creditors cannot pursue judgments or garnishments against Social Security or veterans’ benefits including retirement, disability payments, or survivors’ benefits. Similarly, creditors cannot pursue payments from the Nevada Department of Health and Human Services or welfare payments. These exemptions are also extended to federal retirement programs including FERS and CSRS.
Additionally, creditors are prohibited from pursuing more than 25% of an individual’s after-tax income. However, this is an adjustable percentage and if the individual’s weekly earnings do not exceed more than 50 times the minimum wage, then the debtor’s income is entirely exempt from judgment.
Debtors are also prohibited from pursuing judgments against child support payments, spousal maintenance, and any arrears that are collected.
In addition to sources of income that are exempt, individuals are also allowed to maintain some personal assets. These include $1000 of cash or personal property, up to $500,000 in a retirement plan including assets held in 401K’s, IRA’s, and 403b’s. Debtors can also retain benefits and privileges from life insurance policies and payments from the Nevada Public Employee’s Retirement System.
Individuals are also allowed to retain their primary residence so long as the equity in the property is not in excess of $550,000, and their personal vehicle so long as the equity is not in excess of $15,000. Any values exceeding this amount can be claimed by a creditor in a judgment. In such cases, the creditor can pursue a judgment against the portion of the asset exceeding the exemption.
Other exempt property includes necessary household goods whose collective value is less than $12,000. Similarly, up to $5000 in art collections, jewelry, and knick-knacks are exempt.
Individuals are also allowed to retain up to $10,000 in tools and other equipment required for the performance of an individual’s profession. This makes it possible for individuals to continue earning income to support themselves.
A Nevada debt lawyer can assist individuals to protect their assets from liens and judgments from creditors. It is important that debtors know their rights so that they don’t enter into agreements that can strip them of their income and assets that are exempt under the law.