🛡️ Exempt vs Non-Exempt Assets by State

Asset exemptions are legal protections that prevent judgment creditors from seizing certain types of property and income. Every state provides some level of exemptions to ensure that debtors can maintain basic necessities — a roof over their head, a way to get to work, tools to earn a living, and enough income to survive. Without these protections, a single judgment could leave a person completely destitute. ⚖️

For judgment creditors, understanding exemptions is absolutely critical to successful judgment collection. Attempting to seize exempt property wastes time and money. If you levy a bank account containing only Social Security deposits, you’ll get nothing and you’ll have spent filing fees for the privilege. If you try to force the sale of a home in Texas where the debtor has $500,000 in equity, the unlimited homestead exemption blocks you entirely. Knowing what you can take versus what’s protected determines your entire enforcement strategy.

Exemption laws vary dramatically from state to state. Texas and Florida offer unlimited homestead protection — a debtor can live in a $10 million mansion and creditors can’t touch it. States like New Jersey and Maryland offer no homestead exemption at all, making it much easier for creditors to reach real property equity. This state-by-state variation is why a judgment easily collectible in one state can be nearly worthless in another. Your enforcement strategy must be tailored to the specific laws of the state where the debtor’s assets are located. For state-specific details, see our judgment collection by state hub.

Before diving into state-specific details, here’s a broad overview of what assets can typically be seized versus what’s usually protected. Specific amounts vary by state — this is a general framework: 📋

Certain exemptions are established by federal law and apply nationwide regardless of which state the debtor lives in: 🇺🇸

• 🏥 Social Security benefits: Protected under 42 U.S.C. § 407. Banks must automatically protect up to two months of direct-deposited Social Security from levy.
• 🎖️ Veterans benefits: Protected under 38 U.S.C. § 5301. VA disability, pension, and educational benefits cannot be garnished by regular creditors.
• 👴 ERISA-qualified retirement accounts: 401(k), 403(b), and pension plans are exempt under the Employee Retirement Income Security Act.
• 💼 Federal wage garnishment limits: Under the Consumer Credit Protection Act, creditors may garnish the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum wage per week.
• ♿ Federal disability benefits: SSI and SSDI payments are protected from most creditor garnishment.
• 👶 Federal employee retirement: CSRS and FERS benefits are protected from most creditors.
• ⚓ Military benefits: Active duty pay has protections under the Servicemembers Civil Relief Act.

🏠 Homestead Exemptions

The homestead exemption protects a debtor’s equity in their primary residence. This is typically the most important exemption because real estate is often the most valuable asset. Homestead exemptions range from zero in some states to unlimited in Texas, Florida, Kansas, Iowa, and Oklahoma. In unlimited homestead states, a debtor can own a $20 million mansion and creditors cannot force its sale. In limited exemption states, you can force a sale only if equity exceeds the exemption plus all costs and senior liens. Understanding the homestead exemption is essential before recording a judgment lien or attempting a forced sale. Use a real property asset search to identify what the debtor owns.

🚗 Vehicle Exemptions

Vehicle exemptions protect equity in the debtor’s car. Amounts range from $0 to over $60,000, with most states in the $2,500-$7,500 range. Before pursuing a vehicle levy, calculate whether fair market value minus any loan balance exceeds the exemption. Our vehicle asset search provides the information you need to make this calculation.

💼 Wage Exemptions & Garnishment Limits

Federal law sets the floor: creditors can garnish the lesser of 25% of disposable earnings or the amount exceeding 30 times minimum wage. Many states provide greater protection. Texas, South Carolina, Pennsylvania, and North Carolina prohibit or severely restrict wage garnishment for most consumer debts. If the debtor lives in one of these states, rely on bank levies or property liens instead.

👴 Retirement Account Exemptions

Retirement accounts enjoy broad protection. ERISA-qualified plans (401k, 403b, pension) are exempt under federal law with no dollar limit. IRAs are protected up to approximately $1.5 million. In practical terms, retirement accounts are almost never available for levy unless the debt involves taxes, child support, or alimony.

🛏️ Personal Property Exemptions

Every state exempts some personal property including household goods, clothing, furniture, and appliances. Tools of the trade — equipment needed to earn a living — are also typically exempt up to a dollar amount. Luxury items, collectibles, and non-essential valuables are generally NOT exempt. A debtor examination can reveal what personal property exists and its value.

📋 Other Important Exemptions

Additional commonly protected categories include: life insurance cash values, unemployment benefits, personal injury settlements, burial plots and prepaid funeral expenses, college savings plans (529 accounts), health savings accounts (HSAs), and alimony or child support received by the debtor.

Click any state name for detailed judgment collection procedures specific to that state. Exemption amounts are approximate and subject to periodic adjustment. 📊

If your debtor lives in one of these states, collection chances are generally higher because exemptions provide less protection: 💰

• 📍 Maryland — No homestead or vehicle exemption. Creditors can reach virtually all property.
• 📍 New Jersey — No homestead or vehicle exemption, though wages are well-protected at 90%.
• 📍 Georgia — Very low homestead ($21,500) and moderate vehicle exemption ($5,000).
• 📍 Kentucky — Very low homestead ($5,000) and low vehicle exemption ($2,500).
• 📍 Illinois — Low homestead ($15,000) and low vehicle exemption ($2,400).
• 📍 Tennessee — Low homestead ($5,000-$7,500) with no separate vehicle exemption.
• 📍 Virginia — Low homestead ($5,000-$10,000) combined with moderate vehicle exemption.

In these states, judgment liens and asset levies are more likely to yield results because less equity is shielded.

If your debtor lives in one of these states, collection is more challenging and you’ll need more creative strategies: 🛡️

• 📍 Texas — Unlimited homestead, no wage garnishment, generous personal property exemptions. The toughest state for creditors.
• 📍 Florida — Unlimited homestead, 100% wage protection for heads of household.
• 📍 Kansas — Unlimited homestead and $20,000 vehicle exemption.
• 📍 Iowa — Unlimited homestead with moderate vehicle and personal property exemptions.
• 📍 Oklahoma — Unlimited homestead with $7,500 vehicle exemption.
• 📍 North Carolina — No wage garnishment for most debts.
• 📍 Pennsylvania — No wage garnishment for most consumer debts.

In debtor-friendly states, focus on bank levies (non-exempt account funds), business assets (which lack personal asset protections), and debtor examinations to identify anything reachable. Even in Texas and Florida, debtors have bank accounts, investment accounts, and business interests that can be reached. The cost of giving up is always higher than staying vigilant.

This is crucial: most exemptions must be actively claimed by the debtor. If the debtor fails to file a claim within the statutory deadline, they may lose the protection — even for normally exempt assets: 📋

• ⚡ Automatic exemptions: Banks must automatically protect two months of directly deposited federal benefits (Social Security, VA, SSI) without debtor action. The bank identifies these by their ACH codes.
• 📄 Claimed exemptions: For most other assets, the debtor must file a written claim with the court within 10-30 days after levy notification, identifying specific assets and the legal basis.
• ⚖️ Hearing: If you dispute the claim, the court holds a hearing. You have the right to challenge any exemption claim you believe is invalid.
• ⏰ Missed deadlines: If the debtor fails to file in time, they waive the exemption. This happens more often than you’d think — especially with debtors who don’t understand the process.

Understanding exemptions directly shapes your collection strategy. Here’s how to maximize recovery: 🏆

• 🔍 Run an asset search first. Before spending on writs and levies, identify what the debtor owns through a professional asset search. Compare those assets against state exemptions to determine what’s reachable. Results in 24 hours or less.
• 🏦 Target bank accounts first. Bank accounts are cheapest and easiest to levy, and they’re only partially protected. Time your levy for right after payday when non-exempt funds are highest.
• 🏢 Focus on business and investment assets. Business accounts, commercial property, and non-retirement investments generally lack the protections personal assets enjoy. See our guide on collecting from businesses.
• 📊 Use multiple tools simultaneously. Combine levies, garnishments, liens, and debtor examinations. Each reaches different assets.
• 🔄 Monitor for changed circumstances. Life changes create new opportunities. Renew your judgment and keep liens current.
• 🕵️ Watch for fraudulent transfers. If the debtor is moving assets, these may be fraudulent conveyances a court can reverse. Our social media investigation and hidden asset investigation can uncover suspicious transfers.
• 📍 Consider the debtor’s state carefully. If the debtor owns property in a creditor-friendly state, you may have better options there. You may need to domesticate your judgment first. Compare your options in our state-by-state guide.
• 🤔 Evaluate professional help. Compare DIY vs. professional collection to decide what’s right for your judgment. Our judgment recovery services handle everything from locating the debtor to coordinating enforcement.