Collections V

Consumer Protection Laws - Part 2

Exemptions

Purpose

Keep essential items of property to sustain life or create income

Homestead

This deals with Equity in Real Property

Choice of options

20,000 per spouse in your residence, or

5,000 per spouse in other property

You can't claim both

Restrictions

Must be in Utah

Must be on Title

Mobile Homes may not currently qualify

You must file a written declaration before the attempted sale date

With County Recorder

Or with Bankruptcy Court

How does it work

Get out paper and pencil

Write down the value of your house

If you are not sure

What has a similar house in your neighborhood sold for

What does the tax valuation notice say

Remember this is what the house will really sell for, not what is hoped for

Subtract any current debt

Mortgages

Tax Liens

Judgements against you

They become automatic liens against the property

Except creditor you are concerned with

Subtract the cost of selling the property

Usually 6% of FMV

Now, subtract the homestead you are entitled to

If you get a negative number

Creditors will generally not be interested in your home

They can't sell it for a profit

If you get a positive number

They may attempt a sale, however -

If a creditor sells your home (except for the mortgage holder)

They must pay off the existing debts

They must pay you your homestead amount.

General Property Exemptions

There are a number of other items that you may have an unlimited exemption in

Meaning you keep the item regardless of value

There are some exceptions to the list I'm going to give you

Such as a security interest in the item

You purchased the item from someone who did their own financing (like RC Willey, Granites, Gateway, Circuit City, etc.

You signed a Security Agreement and UCCI with some one who gave you a loan, like a bank, credit union, or quick loan outfit (Gentry, Quick Loan, Security Finance, etc.

A repairman's lien

Collection on

Alimony, support or maintenance

One months unpaid earnings

State or local taxes

Government assessments for public improvements

There are a few other limitation that I'll mention as we go along.

Now the list

Burial Plots

Health Aids necessary to sustain health or allow you to work

Disability, illness or unemployment benefits

Note: there can be a problem with these (and ones that follow) once you put them in the bank. The creditor may not know they are exempt. If they attempt to take them you must request a hearing from the court to object. Fail to object and you lose your exemption.

Medical, surgical or hospital benefits

So long as they are used to pay for such benefits

Veterans benefits

Child support

One washer, dryer, fridge, freezer, stove, microwave, sewing machine, carpets, 12 months supply of food, clothing (except furs), beds and bedding.

Pictures of your Family, unless kept for sale

Insurance proceeds for compensation for personal injury

No exemption for amounts to reimburse costs or punatives

Retirement of 401K money except

401K if terminated employment

contributions in last 12 months

Unqualified plans

Amounts Necessary for Support

To qualify you must show by your actual budget that these funds are needed

Alimony or Separate Maintenance

Insurance Death Benefits

Retirement, Pension, Profit Sharing, Annuity, or Stock Bonus Plans

Equity in Life Insurance Policies

5,000.00

The next Items have Dollar Limitations

500 per spouse in

Sofas, chairs and related furnishings

Dining and kitchen tables and chairs

Animals, books and musical instruments

Heirlooms or items of sentimental value

Wedding rings

Hunting and fishing equipment

3500 per spouse in

Tools of the trade

Note: this does not include inventory or accounts receivable

2500 per spouse in

Motor vehicle

Note: motorcycle does not qualify unless it is your primary daily transportation.

Recreation vehicles don't qualify unless it is a van used in daily transportation