Need Assistance Post Judgment? The Law Office of Matthew C. Bothwell is here to help.
Jacksonville’s debt relief lawyer, Matthew C. Bothwell, Esq., can help protect you and enforce your rights after judgment has been entered against you. You have rights after judgment and, often times, a creditor collecting on a judgement can be harder than obtaining the judgment itself.
After judgment is entered against you your creditors have the right to collect on the debt by garnishing your wages, repossessing property securing the debt or levying your personal property. While this seems scary, Florida offers numerous protections for debtors who have judgments against them called exemptions. These exemptions can make collecting after judgment extremely difficult and may render you completely judgment proof. Here is a list of common judgement creditor exemptions available to protect you from creditors after judgment has been entered against you:
Florida Statute 222.22 and the Florida Constitution protect certain property from garnishment or seizure by creditors after judgment. Property falling under any of the below categories cannot be garnished or seized by your creditors before or after judgment.
Homestead – Your homestead, defined as real or personal property, including mobile or modular home and condominium, not exceeding 1/2 acre in a municipality or 160 acres elsewhere is protected from Chapter 7 liquidation to unlimited value. This exemption protects 100% of the value of your home from the trustee but will not protect it from creditors holding liens such as a mortgage.
Mobile Home – A mobile home on leased land is exempt.
Personal Property – Prepaid hurricane savings accounts, prepaid medical savings account deposits, and prepaid college education trust deposits are exempt from liquidation by the trustee. Prescribed health aids, federal income tax credits or refunds, and pre-need funeral contract deposits are also exempt.
Property Credit – There is also a credit for any personal property up to $1,000 of its fair market value which may be doubled if you are filing jointly with your spouse. If you do not claim the Florida homestead exemptions, Florida law allows for a $4,000 compensatory exemption that may be doubled if filing jointly with your spouse. This means that if you and your wife file for bankruptcy and do not claim the homestead exemption you will be able to protect $10,000 of your personal property from the bankruptcy trustee. If you are filing alone and do not claim the homestead exemption you can protect $5,000 of personal property.
One Vehicle – A motor vehicle up to $1,000 ($2,000 if owned jointly by spouses),
Wages – The head of household may claim 100% of earnings up to $500 a week as exempt, which applies to either unpaid or paid wages, or wages deposited in a bank account for up to 6 months. If you are a Federal government employee your pension payments that are needed for support and were received up to 3 months prior to the bankruptcy are exempt.
Pensions – Tax exempt retirement accounts, traditional IRAs and Roth IRAs up to $1,095,000 per person and pensions of state officers and employees, county officers and employees, teacher, firefighters and police officers are also exempt. ERISA – qualified benefits, IRAs and Roth IRAs are likewise beyond the reach of the bankruptcy trustee.
Public Benefits – Public assistance, unemployment compensation, Veterans’ benefits, disability income and social security benefits are also exempt from seizure as are settlements or payments received from workers’ compensation claims. Compensation received by crime victims’ is exempt from liquidation unless you are seeking to discharge a debt for treatment of the crime related injury.
Alimony and Child Support – Alimony and child support needed for support are also exempt from discharge.
Insurance – Death benefits payable to a specific beneficiary, annuity contract proceeds excluding lottery winnings, life insurance cash surrender value, disability or illness benefits and fraternal benefit society benefits are beyond the reach of the trustee. Damages to employees for injuries incurred in hazardous occupations are also beyond the reach of the trustee.
Tenancy by the Entireties:
In addition to the exemptions noted above created by the Florida legislature, judges and the courts have created another protection for debtors known as tenancy by the entireties. Tenancy by the entireties is a form of property ownership under which a husband and wife hold and own property as one unit. When property is owned as tenancy by the entireties it is considered “non-severable” without the joint consent of the spouses and creditors of one only spouse (the husband or the wife) cannot seize or levy the property; it will not protect property from a creditor of both the husband and wife. Tenancy by the entireties may exist for either real property or personal property and while it has limitations, and the protection it offers is being slowly eroded away by the court, tenancy by the entireties still has value.
There are “6 unities” or factors that must exist for property to be held as tenants by the entireties and qualify for creditor protection:
One: Unity of Possession – Both spouses (husband and wife) must have joint ownership and control of the property.
Two: Unity of Interest – Each spouse has the same interest in the property or bank account as the other and own the property 50/50.
Three: Unity of Time – The interests of both spouses in the property have been acquired at the same time or simultaneously.
Four: Unity of Title – Spouses must have ownership under the same title.
Five: Survivorship – On the death of a spouse, the surviving spouse becomes the sole owner of the property. Not that property owned as tenancy by the entireties loses its creditor protection upon the death of either spouse.
Six: Unity of Marriage – The parties must be married at the time the property is titled in their joint name.
When property is held as tenants by the entirety, only the creditors of both the husband and wife, jointly, may garnish or levy the tenants by the entirety property
Filing bankruptcy automatically stays collection efforts even after judgment has been entered against you for the duration of the bankruptcy case or until an order is issued by the bankruptcy judge lifting the automatic stay and allowing creditor collections. Bankruptcy will stop repossessions, stop garnishments, stop foreclosures and stop harassment from creditors even after judgment. It will also discharge most debts and give you an opportunity for a fresh financial start. While bankruptcy is not the best choice for everyone, the pros and cons of bankruptcy should be considered by anyone against whom final judgment has been entered. For more information on bankruptcy before or after judgment please review our Bankruptcy page.
If you are not judgment proof, you do not want to file bankruptcy and you are worried that your creditors will haunt you for decades; you may want to explore reaching a settlement with the bank to pay off and settle the final judgment. Most banks or debt collectors will settle debt for less than is owed and often times we find that banks are more willing to discuss settlement after final judgment has been entered in their favor. This is especially true when dealing with credit unions.
There is an art to settling debt in your favor and it is not always easy to come to agreeable terms. In settlement negotiations the bank wants to recover as much money as possible as quickly as possible, while debtors want to pay as little as possible and, in many cases, make payments overtime. Striking a balance between these two opposite desires can be tricky. From the bank’s perspective it must balance the expense it will undertake to collect the debt with the likely hood that it will actually collect and the possibility of bankruptcy. If the bank cannot get to your property or you file bankruptcy, they lose. On the other hand, if you have non-exempt assets you may be subject garnishment or levies. To settle on the best terms it is important to convince the bank that it will be extremely difficult for them to collect from you.
If you have questions concerning after judgment collection Jacksonville’s debt collection lawyer, Matthew C. Bothwell, Esq., is here to help. Please contact us for your FREE CONSULTATION.
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