What Personal Property Can Be Seized in a Judgment?

Creditors threaten you over old debts. You worry they’ll take everything you own. You need to know what personal property can be seized in a judgment.

Mounds of debt can lead to court. You might not respond or simply lose your case. A judgment gets placed against you.

Judgments give creditors legal means to garnish your wages. They can also target your bank accounts and property. Nothing happens automatically though.

Creditors must take action to satisfy or discharge the debt. They may dip into your bank accounts first. No funds? They’ll look at your personal property instead.

You must know which assets a judgment creditor can seize. Our partner Solo helps you respond to debt collectors and protect your assets.

Creditors Must Obtain and Review Your Assets

Creditors obtain the judgment first. Then they’re responsible for collecting the asset. The court steps out of the picture at that point.

The creditor must find out which assets you own. They then attempt to obtain them to satisfy the judgment. Creditors typically do this only after you’ve claimed you can’t pay.

Creditors must request a Motion for Examination of Judgment Debtor. The judge must sign it. You’re then required to appear in court.

You could be held in contempt if you don’t show up.

What Happens at the Debtor Examination

You’ll be placed under oath at the judgment debtor examination. You must answer questions honestly about your assets. Dishonest answers put you at risk of perjury.

Perjury carries heavy fines and even jail time. You’re not required to volunteer information, though. The creditor must do their homework and ask the right questions.

The next step involves filing another motion in court. Creditors must attach a claim to your assets or properties. Only non-exempt assets can be claimed.

Assets That Creditors Can Seize

Assets and properties include physical property like homes or cars. They also include other forms of personal property. Property can be something you don’t own or control yet.

Future properties or assets you might inherit are also fair game. Certain limits exist on these repossessions in terms of value.

Property includes your home, boats, cars, and cash. Accounts matter too: stocks, bonds, IRA accounts, and salary.

Assets that creditors can seize include:

• Bank accounts
• Investment accounts
• Inheritances
• Assets owned by your spouse
• Personal homes (varies by state)
• Rental properties
• Vehicles
• Business equipment
• Up to 25% of wages
• Assets recently transferred to someone else

You might not own your home or car. You may think there’s nothing to take from you. Smart creditors will include items you never thought possible to seize.

Each state has different laws. Check your local laws to understand what’s at risk.

Creditors may go after property you don’t yet own. Property isn’t always a tangible asset. Work commissions count as property.

Royalties and tax refunds do too. Our partner Solo can help you respond to collectors before they seize your assets.

How to Protect Your Assets

Certain careers face higher litigation risk. Doctors and financial advisors get sued for malpractice more often. Many other professions face the same boat.

You may want to protect your assets regardless of your field. Several methods exist for doing this.

The best time to protect assets is before you’re sued. You can still attempt protection after being named a defendant. Your options may be limited, but it’s worth trying.

Consider placing assets in a trust. Transfer them to someone you trust, like your children or beneficiaries.

Know Your Rights as a Debtor

A lawsuit gets filed against you. You need to educate yourself on your rights as a debtor. Creditors are entitled to specific things if they win.

You need to know what those things are. You might lose more than you thought you would.

Every state has different exempt assets or properties. Check your state’s exemption list to understand what’s at risk. The best way to protect assets is to have a plan.

Create an asset protection plan before creditors act. You might be in debt, but you shouldn’t lose everything. You’ve worked too hard for what you own.

Respond to Debt Collectors Before Judgment

Responding to a debt collection lawsuit protects your assets. You have defenses available to you. Many debt lawsuits contain errors or violations.

The statute of limitations may have expired. The debt collector might lack proper documentation. You could lack standing to sue.

You must respond within the deadline on your summons. Most states give you 20 to 30 days. Missing this deadline results in a default judgment.

Default judgments happen automatically. You lose the case without a hearing. Creditors then pursue wage garnishment and property seizure.