Exemptions are legal provisions that protect certain types of a debtor’s assets or income from being seized by creditors, even in the case of a court judgment. These exemptions are defined by state or federal laws and can include a portion of the debtor’s wages, personal property like clothing and household goods, public benefits such as Social Security or disability payments, and in some cases, equity in a primary residence or a vehicle.
The purpose of statutory exemptions is to ensure that debtors retain the basic means of living and are not rendered destitute by debt collection efforts.
Most withdrawals or distributions from retirement accounts can be protected even after being deposited into a bank account. The protection is dependent on state law and proper asset protection design. IRA, Pension and 401k Retirement…
Suppose an employee has a stock purchase plan with his employer under IRS Code 423. The employer’s stock is publically traded. The plan gives the employee the option to receive stock in the employer company…
A client wanted to know whether his commissions would be exempt from garnishment as head of household income even though the commissions were paid on a 1099 and the client was considered an independent contractor….
The general rule is that Florida residents cannot export Florida asset exemptions to other states. Therefore, out of state, or “foreign” judgments pose unique risks to judgment debtors living in Florida. Even though the judgment…
Some debtors are surprised when I tell them that the household furnishings and clothing they used on a daily basis are not exempt from their judgment creditors. Some people think that Florida law permits them…
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 married couple came to see me about a foreclosure on their homestead. The man bought a Florida homestead where he lives with his wife. There is a judgment against the husband. He paid cash…
Exemption of a debtor’s interest in ESOP plans depends upon statutory provisions and the terms of the company’s written plan documents. One of my clients asked me to evaluate his interest in an ESOP containing…
A new client invested in a ponzi scheme. He withdrew his investment, including a “profit” just before the ponzi scheme collapsed. The SEC appointed a receiver to go after investors who received profits as fraudulent…
Client lives in California and has purchased a Virginia based 529 college savings. His financial adviser told him that Virginia plans offer advantageous investment options. The client says that Virginia law provides that Virginia 529…
