What Personal Property Can Be Seized in a Judgment?

Chloe Meltzer | December 02, 2022

Chloe-Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Have a creditor threatening you over an old debt? Worried they'll take everything you own? Find out what personal property can be seized in a judgment and what you can do about it.

If you find yourself with mounds of debt and are unable to pay them off, you may end up being taken to court. If you do not respond, or you simply lose your case, then a judgment will be placed against you. Having a judgment placed against you means that the creditor will have legal means to garnish your wages, bank accounts, and property. Despite this, it is not something that happens automatically, but the creditor does need to take action to satisfy or discharge the debt.

When the creditor goes to satisfy their judgment, they may dip into your bank accounts, but if you do not have funds, they might look into your personal property instead. Therefore, you must know which of your assets can be seized by a judgment creditor.

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Creditors are responsible for obtaining and reviewing assets

Once the creditor obtains the judgment, they are responsible for collecting the asset. The court is then out of the picture. The creditor will be in charge to find out which assets the debtor owns, and attempting to obtain them in order to satisfy the judgment. Typically this is done only after a debtor has fled that they are unable to pay due to lack of funds.

In order for a creditor to review your assets, the creditor must request a Motion for Examination of Judgment Debtor. This is an essential step because the judge must sign it, and this requires you to appear in court. Otherwise, you might be held in contempt of court.

What happens at the examination

At the judgment debtor examination, you will be placed under oath. Then you must answer questions honestly about your assets. If you do not answer honestly then you are at risk of perjuring yourself.

Perjury can carry a heavy fine and even jail time. Despite this, you are not required to volunteer information. Rather, the creditor must do their homework and ask questions to learn about your assets.

The next step involves filing another motion in court. They must then attach a claim to the debtor's assets or properties that are not exempted by the state.

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Assets that creditors can seize

It is important for you to know that assets and properties can mean physical property, like a home or car, but can also mean other forms of personal property. Property can also be something that you do not own or control, as well as future properties or assets that you might inherit. There are certain limits on these repossessions as well in terms of value.

When mentioning property, you might only think of your home, but there are other things as well, such as boats, your car, or even cash. Another thing you may not think about is your accounts, stocks and bonds, IRA accounts, and even your salary.

Assets that credits can seize include:

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

Even if you do not own your home or car, then you may think that there is nothing to take from you. If the creditor is smart, then they will include items that you may have never thought were possible to seize. Each state does have different laws, so it is important to be aware of this and check into your local laws as well.

Although it is an odd concept, creditors may be able to go after a property you do not yet own. This occurs often and is because a property is not always considered a tangible asset. Commissions from work can be considered property, as well as royalties, or even tax refunds.

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Protected assets

There are certain careers that are a higher risk of litigation. For example, a doctor, or a financial advisor are more likely to be sued for malpractice. Despite this, many other professions may be in the same boat. Whether or not you are in this field, or simply in debt, you may want to look into protecting your assets. There are a few methods of doing this.

The best time to protect your assets is far before you are sued. Even after you have been called as a defendant in a lawsuit, you can still attempt to protect your assets. Although it may limit your options at that time, it is still worth it to try. You might consider protecting your assets by placing them in a trust or transferring them to someone you trust (such as your children or beneficiaries).ends from shares might be attached, as well as vested and assignable stock options.

Educate yourself on your rights as a debtor

If you have found that a lawsuit is filed, then you need to educate yourself on your rights in that state as a debtor. Creditors are entitled to specific things if they win the case, and you need to know what those are. You need to also understand that you might lose more than what you thought you were going to.

Every state has different assets or properties that are exempt from seizure. It is important to check this list to understand what is at risk and what is not. The best way to protect your assets is to have a plan. Create an asset protection plan to avoid having your assets seized should you be placed in jail. You might be in debt, but it does not mean you should lose everything you have worked so hard for.

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