Claims of Exemption

by Antonia Gordon and Bryan Grundon

There are many ways to collect on a judgment. Wage garnishments and bank levies happen to be two of the most common and reliable methods. With the first, we can garnish a debtor’s wages and thus ensure consistent payments on a judgment. With the second, we gain access to whatever funds a debtor has in their account at the time of the levy.

Unfortunately, garnishments and levies may not always be completely successful. After the Sheriff serves one of these on a bank or employer, the debtor receives notice and has a chance to respond to it. They can complete a form called a claim of exemption, which allows them to claim part (or all) of their wages or the funds in their bank account as exempt. If the claimed wages or funds are necessary to support the debtor or their family, the court may grant their claim (in full or in part), and we will not be able to collect the full amount from the garnishment or levy. The debtor, however, must provide proof that their earnings or funds are exempt. The first step to this is filling out a financial statement in which they list their monthly earnings and expenses, including those of their spouse.

Once a debtor files a claim of exemption, you have the opportunity to oppose it. If you do not oppose it by following a very specific procedure, the exemption is granted by operation of law. Opposing a claim of exemption involves reviewing the debtor’s financial statement to look for any inconsistencies or excessive spending. If we believe that the debtor can afford to pay more than they claim, we will set a hearing with the court and file paperwork to oppose the claim. At the hearing, both parties will get the chance to argue their side. In most cases, the debtor can afford to pay at least a small amount, even when they claim they cannot afford to pay anything at all. In their financial statements, debtors may overestimate how much they spend on certain things, such as food and gas. We have even had debtors claim they make a certain amount per month only to have their employer reveal that they actually make significantly more. Judges are never happy to see this kind of deception! We make sure we have the full story before going to court, so the debtor ends up paying what they can actually afford, and you are able to collect on your judgment.