DEBTORS’ RIGHTS IN FLORIDA: CLAIMING YOUR EXEMPTIONS FROM JUDGMENTS
By The Florida Bar and Three Rivers Legal Services, Inc., January 2019
You can’t go to jail for failing to pay a debt or a judgment. However, if you do not pay a debt, or if a judgment is entered against you, this information can be reported to credit bureaus and made a part of your credit history. This information can be reported for up to seven years on your credit reports. This pamphlet describes your right to claim certain exemptions when a judgment is obtained against you.
After a judgment is entered against you by the court, you are called a judgment debtor. A judgment is an order entered by a judge at the end of a lawsuit. A judgment lasts for up to 20 years. This means that the person who obtained the judgment can collect on it until it is fully paid, for up to 20 years after it is filed with the clerk and recorded. Interest accrues every year as set by the chief financial officer of the state of Florida. A creditor who obtains a judgment against you is called a judgment creditor. A judgment creditor can require you to attend a deposition and give information about your income and assets.
The court can require you to give written information or testimony about your income, assets, property, employer and Social Security number. If a judgment is entered against you by a court, your wages or bank account may be taken from you to pay the judgment through legal proceedings called garnishment and attachment. Through a process called execution, a creditor can collect money owed under a judgment. This may include the seizure of personal property and real property. When this happens, a judgment creditor pays a bond to the local sheriff to seize personal property owned by a judgment debtor so that it can be auctioned and the proceeds applied to pay the judgment.
The garnishment law allows the judgment creditor to obtain a continuing writ of garnishment, which orders your employer to deduct money from your paycheck until you have paid off the judgment.
Your home and Florida’s homestead exemption
If you own the home you live in, your home is protected from all creditors except those holding a mortgage or lien on your residence. You can exempt or protect your home and up to one-half acre of land from any forced sale if you live in an incorporated area. This also applies to mobile homes. If you live in an unincorporated area, you can protect up to 160 acres as homestead property.
Under most circumstances, a lien cannot be placed on your home for a debt that has nothing to do with your home. However, creditors who lend you money to buy, improve or repair your home may put a lien on your home. Nonetheless, if a creditor has a mortgage on your home, no matter what the purpose of the mortgage, you are not protected by the homestead exemption.
To protect your home, an affidavit describing your home and claiming it as your homestead must be filed with the court. This is different from the homestead tax form you file with the county property appraiser every year. Florida Statute 222.01 provides the type of notice and affidavit you will need to file.
Your personal property
If you do not claim the homestead exemption described above, you have the right to claim a personal property exemption of up to $4,000 per person. Unless the judgment creditor has a lien or security interest in the property (for example, a furniture loan), you can protect up to $4,000 of your personal belongings. Note that this exemption does not apply to child or spousal support debts.
If you own more than $4,000 worth of personal property, you can choose which property to protect. The personal property can include money held in a bank account.
You also can claim an exemption of up to $1,000 of the value of your vehicle under Florida law. This means that your vehicle cannot be taken to satisfy a judgment unless the value of the car, less all debts for which the vehicle is collateral, is greater than $1,000.
If a judgment creditor or sheriff takes your vehicle under an execution and its value to you is less than the value that you claimed as exempt as above described, you can apply to the court for recognition of your exemption and request the return of your vehicle. Your affidavit of exemption should be filed with the court and the sheriff.
You can combine the $1,000 vehicle exemption with the $4,000 personal property exemption. In this case, for example, you would be able to claim a total exemption of $5,000 for your vehicle.
Spousal exemption for jointly held property
If a judgment is against only you and not your spouse, your spouse is entitled to protect his or her interest in the property. Property that is held by a husband and wife is called tenancy by the entirety and cannot be divided. This means jointly held property is not subject to the claims of creditors of the husband or wife individually. This applies to real property as well.
The judgment debtor and/or the debtor’s spouse must file an affidavit with the court and the sheriff to obtain the exemption and protect the property from the judgment creditor.
Similarly, another person who has an ownership interest in the property with you may file an affidavit showing the right of ownership and requesting the court to return the property. The judgment creditor may contest the claim of exemption and request a hearing.
IMPORTANT: Transfers of property that are fraudulent or are made solely to keep the property from creditors may cause the property to lose its exempt status.
Florida head-of-family exemption: If a person makes $750 or less per week in net wages, and the person is a head of family, those wages are exempt from collection. A head of family is a person who provides more than one-half of the support for a child or other person. Wages in a bank account that belong to a head of family retain their protection from being seized for six months, even if the wages are mixed with money from other sources.If you agree in writing to allow wages to be taken to pay the debt, and you make more than $750 in net wages per week, you will not get this exemption. If a head of family does not agree in writing to allow the garnishment or attachment of wages, all the wages are exempt. You must file an affidavit with the court to declare your head-of-family status and protect your wages from being taken.
Federal law: All people, including those who do not qualify as a head of family, have the protection of federal law, which limits the amount of wages that can be garnished. Garnishment cannot exceed 25 percent of your net wages or the amount that you take home per workweek that is more than 30 times the federal minimum hourly wage, whichever is less. Subject to these restrictions, a creditor can continue to garnish your wages under a continuing writ of garnishment until the judgment is paid in full.
With limited exceptions, the following benefits are exempt from collection: Social Security benefits, workers’ compensation benefits, veterans’ benefits, federal military annuities and survivor’s benefits, FEMA disaster assistance, federal civil service and military and survivor’s benefits, retirement benefits, life insurance proceeds of a deceased person, cash surrender value of a life insurance policy and annuity contracts, college savings funds, educational IRA/Coverdall educational savings accounts, medical savings accounts, hurricane savings accounts, earned income tax credits, ABLE program authorized by law, and reemployment benefits.
All professionally prescribed health aids used by you or your dependents are exempt from being taken by creditors. Other types of income, including Social Security benefits, worker’s compensation, unemployment benefits, disability benefits, veteran’s benefits and retirement benefits are exempt from garnishment. Pensions, 401(k) plans, life insurance proceeds, college savings funds, medical savings accounts and earned income credits from your taxes are also exempt from collection.
Procedure for claiming your exemptions
You may claim your exemptions from garnishment by filing an affidavit with the court describing the exemption and your claim to it. Your affidavit also must be sent to the judgment creditor and any attorney for the judgment creditor. The judgment creditor must challenge your exemption within eight to 14 days, depending on the method of service. If the judgment creditor challenges your exemption, a hearing will be scheduled. If the judgment creditor doesn’t object to the claim of exemption and request for hearing within the time frame, you can ask the court to dissolve the writ without the need for a hearing. Notice of the hearing must be given to the judgment creditor. Under current Florida law, if your wages or bank accounts are going to be garnished, after a judgment has been entered, you will not receive any notice until after the wages have been withheld or a hold has been placed on your bank account. The judgment creditor must send you a copy of the writ of garnishment, a copy of the answer filed by your employer or bank and a notice telling you about your right to request that the court stop the garnishment or execution.
Bankruptcy: Bankruptcy may be another option for you. Information about your rights in bankruptcy is available from The Florida Bar at www.floridabar.org in the “Consumer Pamphlets” section.
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