What Assets Are Protected from Seizure in a Judgment?

Common Exempt Assets

Most states protect the following types of property from judgment creditors:
• Clothing and personal effects
• Basic household furnishings and appliances
• Primary residence (homestead exemption)
• Vehicle, up to a certain value
• Tools of the trade
• Retirement accounts
• Public benefits (Social Security, unemployment, etc.)
• Life insurance policies
The specific exemption amounts vary by state, but the goal is to allow debtors to maintain a basic standard of living while repaying debts.

Homestead Exemption

Your primary residence often receives special protection through homestead exemption laws. While the exempt amount differs widely between states, it can range from $5,000 to unlimited value in some cases. This exemption helps prevent families from losing their homes due to financial hardship.

Vehicle Exemption

Most states allow debtors to keep at least one vehicle, typically up to a certain value (often between $2,500 and $7,500). This ensures you can maintain transportation for work and essential activities.

Retirement Accounts and Benefits

Retirement savings and benefits usually receive strong protection from creditors. This includes:
• 401(k) plans
• IRAs
• Pension plans
• Social Security benefits
• Disability benefits
• Unemployment compensation
These exemptions aim to preserve your long-term financial security and essential income sources.

Tools of the Trade

If you’re self-employed or work in a trade, you may be able to exempt tools, equipment, and other items necessary for your livelihood. This protection helps ensure you can continue earning an income to repay debts.

What Can Creditors Take?

While many assets are protected, creditors may still be able to seize:
• Luxury items
• Valuable collections
• Second homes or vacation properties
• Expensive vehicles beyond the exemption limit
• Non-retirement investment accounts
• Business assets (beyond tools of the trade)

How to Claim Exemptions

To protect your assets, you typically need to:

File a claim of exemption with the court
Attend a hearing to prove your exemptions
Provide documentation of asset values and their exempt status

It’s crucial to act quickly when facing a judgment, as there are often strict deadlines for claiming exemptions.

Remember, exemption laws are complex and vary by state. Consulting with a local attorney can help you understand your rights and maximize your asset protection.