By Stephen J. Muhonen, Creditor’s Rights / Collections Attorney, Racine Olson, PLLP
One of the first things I discuss with new clients whom are seeking legal representation to collect money from their debtors is whether the debtor has any assets that can be collected upon. In my opinion, an attorney taking on a new client in this circumstance, without initially exploring collection opportunities or options, is performing a great dis-service to the client. The client came to the attorney in the hopes of being paid that for which they are entitled. If all that is obtained is a “toilet-paper” judgment, then what has the client gained? Now of course I realize and recognize that sometimes the collectability of a pursued judgment cannot always be readily discovered, but there should at least be some attempt to see if collection is even going to be a possibility.
When performing the due diligence of exploring debtor’s assets, the investigation should take place with an eye on what assets may be subject to exemptions. Now just because there are or may be statutory exemptions in place pertaining to the debtor’s property, that does not necessarily mean that one should avoid pursuing the debtor’s property. It is up to the debtor to assert the claim of exemption and to do it timely. If this is not done, the creditor may continue to execute/levy/garnish the property. Some of the exemptions available to debtors are:
Wages: 75% of disposable earnings, unless 75% of the disposable earnings is less than 30 times the federal minimum wage, then debtor is entitled to keep 30 times the federal minimum wage. I.C. §11-207.
Burial Plot: I.C. §11-603(1).
Health Aids: I.C. §11-603(2).
Benefits: I.C. §11-603(2-6). Social Security, veteran’s benefits, (enforcing child support benefits though is another matter), federal, state or local public assistance, medical, surgical and hospital care, and the amounts in a medical savings accounts, child support and unemployment compensation.
Retirement Benefits: I.C. §11-604(A). Government pensions, IRA’s, 401(k)s and 403(b) accounts, pensions, disability allowances, death benefits.
Workers Compensation Benefits: I.C. §72-802.
Support: I.C. §11-604(1)(b). Alimony, child support, maintenance.
Bodily Injury/Wrongful Death Proceeds: I.C. §11-604(1)(c).
Life Insurance Proceeds: I.C. §11-604(1)(d).
Items of Trade/Business: I.C. §11-605(3). Books, equipment, tools of the trade (Total value cannot exceed $2,500.00).
Guns: I.C. §11-605(8). Can claim an exemption on one (1) firearm and value cannot exceed $750.00.
Food and Water: I.C. §11-605(4). 12 month supply and storage.
Homestead: I.C. §55-1003. $100,000.00 exemption.
Household items: I.C. §11-605(1). Furniture, appliances, etc. (Total cannot exceed $7,500.00 and value per item cannot exceed $750.00).
Jewelry: I.C. §11-605(2). Exemption is up to $1,000.00.
Motor Vehicle: I.C. §11-605(3). Can only claim an exemption on one (1) vehicle and the exemption is up to $7,000.00.
This list is not to be considered exhaustive as to available exemptions, but its purpose is to help creditors understand that even if debtors have “stuff,” that does not necessarily mean it can be taken to satisfy a debt. If you are a creditor seeking assistance in collecting a debt that a debtor is refusing to pay, give Stephen Muhonen at Racine Olson, PLLP, a call at 208-232-6101. You can also email Steve at email@example.com.