How To Fight Collection Of A Judgment
Property A Judgment Creditor Can And Can't Take
Learn about property that is “exempt” from the execution process, meaning that a judgment creditor can’t take it from the judgment debtor to pay a civil judgment.
There are certain types of property that a judgment creditor cannot take from a judgment debtor, even to pay a civil judgment. This property is called “exempt” property because it is excluded from the execution process.
FYI! Some judgment debtors are simply “collection proof,” meaning all their income and property is exempt and can’t be taken to pay a judgment. To learn whether you’re collection proof and about the collection process generally, attend the FREE Collection Proof Clinic! To learn more about the clinic, click to visit Free Classes.
Q&A – Exempt Property
What types of income and property are exempt from execution?
Under Nevada law, some of the types of income and property that a creditor cannot take to pay a judgment include:
- Money or payments received pursuant to the federal Social Security Act, including retirement, disability, survivors' benefits, and SSI. (NRS 21.090(1)(y) and 42 U.S.C. § 407(a).)
- Money or payments for assistance received through the Nevada Department of Health and Human Services, Division of Welfare and Supportive Services, pursuant to NRS 422.291. (NRS 21.090(1)(kk) and 422A.325.)
- Money or payments received as unemployment compensation benefits pursuant to NRS 612.710. (NRS 21.090(1)(hh).)
- Money or compensation payable or paid under NRS 616A to 616D (worker's compensation/ industrial insurance), as provided in NRS 616C.205. (NRS 21.090(1)(gg).)
- Money or payments received as veteran's benefits. (38 U.S.C. § 5301.)
- Money or payments received as retirement benefits under the federal Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS). (5 U.S.C. § 8346. Seventy-five percent (75%) of the judgment debtor’s disposable earnings; or eighty-two percent (82%) of the disposable earnings if the judgment debtor makes less than $770 per week. "Disposable earnings" are the earnings remaining "after the deduction . . . of any amounts required by law to be withheld." (NRS 21.090(1)(g)(1).) The "amounts required by law to be withheld" are federal income tax, Medicare, and Social Security taxes.
- If the judgment debtor’s disposable weekly earnings to do not exceed $362.50 or 50 times the federal minimum wage (50 x $7.25 = $362.50), then ALL of judgment debtor’s disposable earnings are exempt. (NRS 21.090(1)(g).)
- If the judgment debtor’s disposable weekly earnings are between $362.50 and $483.33, exempt income is always $362.50. The judgment debtor’s non-exempt income is his weekly disposable earnings minus $362.50.
- Money or benefits received pursuant to a court order for the support, education, and maintenance of a child, or for the support of a former spouse, including arrearages. (NRS 21.090(1)(s)-(t).)
- Money received as a result of the federal Earned Income Tax Credit or similar credit provided under Nevada law. (NRS 21.090(1)(aa).)
- $10,000 or less of money or personal property, which is not otherwise exempt under NRS 21.090. (NRS 21.090(1)(z).)
- Money, up to $1,000,000, held in a retirement plan in accordance with Internal Revenue Code, including, but not limited to, an IRA, 401k, 403b, or other qualified stock bonus, pension, or profit-sharing plan. (NRS 21.090(1)(r).)
- All money, benefits, privileges, or immunities derived from a life insurance policy. (NRS 21.090(1)(k).)
- Money, benefits, or refunds payable or paid from Nevada's Public Employees' Retirement System pursuant to NRS 286.670. (NRS 21.090(1)(ii).)
- A homestead recorded pursuant to NRS 115.010 on a dwelling (house, condominium, townhome, and land) or a mobile home where the judgment debtor’s equity does not exceed $550,000. (NRS 21.090(1)(l).)
- A dwelling, occupied by the judgment debtor and his family, where the amount of his equity does not exceed $550,000, and he does not own the land upon which the dwelling is situated. (NRS 21.090(1)(m).)
- If the judgment being collected arises from a medical bill, the judgment debtor’s primary dwelling and the land upon which it is situated (if owned by the judgment debtor), including a mobile or manufactured home, are exempt from execution regardless of the amount of equity. (NRS 21.095.)
- A vehicle, where the amount of equity does not exceed $15,000, or the judgment debtor will pay the judgment creditor any amount over $15,000 in equity. (NRS 21.090(1)(f).)
- If the judgment debtor’s vehicle is specially equipped or modified to provide mobility for him or his family due to a permanent disability, the vehicle is exempt regardless of the equity. (NRS 21.090(1)(p).)
- A prosthesis or any equipment prescribed by a physician or dentist for the judgment debtor or his dependents. (NRS 21.090(1)(q).)
- A private library, works of art, musical instruments, jewelry, or keepsakes belonging to the judgment debtor or his dependents, not to exceed $5,000 in value. (NRS 21.090(1)(a).)
- Necessary household goods, furnishings, electronics, clothes, personal effects, or yard equipment, belonging to the judgment debtor or his dependents, not to exceed $12,000 in value. (NRS 21.090(1)(b).)
- Money or payments received from a private disability insurance plan. (NRS 21.090(1)(ee).)
- Money in a trust fund for funeral or burial services pursuant to NRS 689.700. (NRS 21.090(1)(ff).)
- A professional library, equipment, supplies, and the tools, inventory, instruments, and materials used to carry on my trade or business for the support of the judgment debtor and his family not to exceed $10,000 in value. (NRS 21.090(1)(d).)
- Money that the judgment debtor reasonably deposited with his landlord to rent or lease a dwelling that is used as his primary residence, unless the landlord is enforcing the terms of the rental agreement or lease. (NRS 21.090(1)(n).)
- Money or payments, up to $16,150, received as compensation for personal injury, not including compensation for pain and suffering or actual pecuniary loss, by the judgment debtor or by a person upon whom the judgment debtor is dependent. (NRS 21.090(1)(u).)
- Money or payments received as compensation for loss of the judgment debtor’s future earnings or for the wrongful death or loss of future earnings of a person upon whom the judgment debtor was dependent, to the extent reasonably necessary for the support of the judgment debtor and his dependents. (NRS 21.090(1)(v)-(w).)
- Money or payments received as restitution for a criminal act. (NRS 21.090(1)(x).)
- Money paid or rights existing for vocational rehabilitation pursuant to NRS 615.270. (NRS 21.090(1)(jj).)
- Child welfare assistance provided pursuant to NRS 432.036. (NRS 21.090(1)(ll).)
This is not a complete list of exemptions. There are other exemptions potentially available under both Nevada and federal law. To determine whether you qualify for any other exemptions, consult with an attorney or research the issue at your local law library. Click to visit Lawyers and Legal Help or Law Libraries.
If a judgment debtor believes his income or property is exempt, what should he do?
A judgment debtor cannot assume property is safe just because it is technically exempt from execution under the law. The judgment debtor must take action to prevent the exempt property or income from being seized or to get it back if it is taken.
Before attachment or garnishment, the judgment debtor can:
- “Homestead” his home or mobile home if he owns it or lives in it. To learn more about claiming a homestead, visit the Clark County Recorder website.
- If the judgment debtor has income that is exempt (like Social Security benefits), he can notify the judgment creditor in writing of the fact that his bank account, for example, has only Social Security benefits in it. This technically does not prevent the judgment creditor from garnishing the bank account, but the judgment creditor is less likely to pursue the judgment if she knows that all funds are exempt.
After attachment or garnishment, the judgment debtor can:
- File a claim of exemption with the court. When a judgment creditor garnishes wages or a bank account or attempts to attach and sell property, the judgment debtor has ten days from the date the notice of the attachment or garnishment is mailed to them (postmarked) to claim that the property or money is exempt.
To learn more about filing with the court and claiming an exemption, click to visit Contesting a Garnishment or Attachment.
FYI! Legal Aid Center of Southern Nevada publishes a number of handy brochures on collection topics, including Attachment and Garnishment, What It Means to Be Collection Proof, and Debt Collection. For copies, click to visit Brochures.
Are there situations in which the judgment debtor’s exemptions should be applied automatically?
Some direct-deposit funds are automatically protected and should not be taken from the judgment debtor’s bank account.
- All exempt federal benefits that were electronically deposited into the judgment debtor’s account during the prior two months are protected, and judgment debtor is entitled to full and customary access to that protected amount. (31 C.F.R. part 212.6(a).) Money in the judgement debtor’s personal bank account that exceeds that amount may be subject to other exemptions.
- If exempt state or federal benefits were electronically deposited into the judgment debtor’s personal bank account during the 45-day period preceding service of the writ of execution or garnishment, the judgment debtor is entitled to full and customary access to $2,000 or the entire amount in the account, whichever is less, regardless of any other deposits of money into the account. Money in the judgment debtor’s personal bank account that exceeds that amount may be subject to other exemptions. (NRS 21.105.)
- If a writ of execution or garnishment was levied on the judgment debtor’s personal bank account, the judgment debtor is entitled to full and customary access to $400 or the entire amount in the account, whichever is less, unless the writ is for the recovery of money owed for the support of any person. Money in the judgment debtor’s personal bank account that exceeds $400 may be subject to other exemptions. (NRS 21.105.)
These “automatic exemptions” should be applied by the bank where the judgment debtor maintains his account.
Are there situations in which money or property can be taken from the judgment debtor even though it’s exempt?
Yes. Money or property that might be exempt under normal circumstances might be taken to satisfy a judgment in certain situations:
- If the judgment is for child support, some of the exemptions (such as 75%/82% of take-home pay) do not apply.
- The judgment debtor cannot claim exemptions if a bankruptcy order directs that the property be taken.
- Exemptions are not available for certain tax liens.
- The judgment debtor cannot claim property is exempt if the judgment was for the purchase, loan, or improvement on that property (for example, the remaining installment payment on a used car that the judgment debtor bought).
To determine whether you can claim available exemptions in your particular situation, consult with an attorney or research the issue at your local law library. Click to visit Lawyers and Legal Help or Law Libraries.