What types of property are exempt from execution and levy?
Each state has its own laws, which exempt certain property from being subject to execution and levy. However, it is important to note that even within these exemptions, there are exceptions that also vary by state. Your home, or homestead property, always falls into this exemption, but may depend on what type of judgment is being enforced.
Some state laws do not allow a homestead exemption when the judgment is for a specific lien, a laborer’s lien or a mechanics lien. Further, the homestead exemption is often limited in its monetary value. For example, Wyoming’s homestead exemption value is $10,000, while California’s homestead exemption value is $50,000 - $150,000, depending on certain criteria. Some personal property is exempt as well.
Exempt Personal Property
Some examples of exempt personal property include your clothing and your wedding ring. Many states do not require a monetary limitation to these particular items. For other types of personal property, however, there is usually a monetary limitation. For example, while many states exempt “tools of the trade” from being taken in a judgment, there is usually a limit. Household appliances are also commonly exempt, within a certain allowance. Other types of jewelry, aside from your wedding ring, may be exempt up to a certain value as well. Some states exempt these things specifically, while others give you a total dollar limit on all types of personal property.
Your automobile will usually fall into a separate exemption as well, within a certain dollar limit. Aside from personal property items and your home, other types of property can be exempt from execution and levy as well. For example, most states do not allow creditors to execute and levy on Social Security or veteran benefits, unemployment or workers compensation, unmatured life insurance policies or the dividend, and payments pursuant to stock bonuses, pensions, profit sharing, annuity or retirement accounts. This is the case even when these payments are already in your bank account.
Filing a Claim of Exemption
If you receive a notice of execution or a levy is performed on property that falls within an exemption, you may file a claim of exemption with the court. After you file a claim of exemption, the court will schedule a hearing. At this hearing, the court will determine if the property is in fact exempt and if it cannot be taken by the judgment creditor. If the court finds that the property is exempt, the property will be returned to you. If the court finds that the property is not exempt or would be exempt normally, but falls into an exception, the levying officer will be able to proceed with the public sale and subsequent delivery of the proceeds to the judgment creditor.
If you have recently received a notice of execution, you should contact a bankruptcy attorney. A bankruptcy attorney will review your claim and determine if the laws in your state allow the property to be exempted from the levy.