One of my new clients had been sued by the Federal Trade Commission for a violation of their statutes pertaining to telephone sales including alleged common law fraud against the victims. A federal court entered a judgment against my client for several millions of dollars damages including an award of over $1 million dollars of “restitution.”The client wanted to know if his Florida asset protection exemptions, including his homestead exemption, would apply to the FTC’s collection of their restitution award.
Judgments in favor of the federal government and its independent agencies are collected by the agencies or the Department of Justice civil division. Collection remedies and procedures are expressed in the Federal Debt Collection Procedure law, 28 U.S.C. 3202. This law says that U.S. government debt collection is subject to state asset exemptions, except that t state exemptions are not effective against the government’s collection of criminal restitution. Criminal restitution awards and collection is provided for under Title 18 of the U.S. Code. Criminal restitution is enforced as a tax debt so that the government can pierce exemptions including placing a lien on the debtor’s homestead.
The FTC had sued my client under Title 15 of the U.S. Code that governs, among other things, the FTC’s regulation of commerce and trade. The FTC action had no allegation of any violation or award under criminal provisions of Title 18. As result, I expect that research would show that my client’s Florida exemptions protect his assets against the FTC’s restitution award.
Last updated on May 22, 2020