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Question: “An unsecured creditor, American Express, is seeking a default judgement for approximately $15,000. I am currently unemployed, my only assets, other than home furnishings and modest vehicles, is about $15,000 equity in my home. To what, besides future wages, can the judgement attach to? I am not in bankruptcy, but may end up there.”
Answer: A judgment creditor can’t attach your $15k of equity since you can exempt up to $150k of home equity in Arizona:
33-1101. Homestead exemptions; persons entitled to hold homesteads
A. Any person the age of eighteen or over, married or single, who resides within the state may hold as a homestead exempt from attachment, execution and forced sale, not exceeding one hundred fifty thousand dollars in value, any one of the following:
1. The person's interest in real property in one compact body upon which exists a dwelling house in which the person resides.
You can exempt your car up to $5000, so if it’s worth that amount or less, then the judgment creditor can’t go after it:
33-1125. Personal items
The following property of a debtor used primarily for personal, family or household purposes shall be exempt from process:
8. One motor vehicle not in excess of a fair market value of five thousand dollars. If the debtor is physically disabled, the fair market value of the motor vehicle shall not exceed ten thousand dollars.
And you can exempt various household furnishings up to $4000:
33-1123. Household furniture, furnishings and appliances
The following household furniture, furnishings and appliances personally used by the debtor are exempt from process provided their aggregate fair market value does not exceed four thousand dollars:
1. One kitchen and one dining room table with four chairs each, plus one additional chair for each dependent of the debtor who resides in the household if the debtor and dependents exceed four in number.
2. One living room couch.
3. One living room chair, plus one additional chair for each dependent of the debtor who resides in the household.
4. Three living room coffee or end tables.
5. Three living room lamps.
6. One living room carpet or rug.
7. Two beds, plus one additional bed for each dependent of the debtor who resides in the household.
8. One bed-table, dresser and lamp for each bed allowed by paragraph 7.
9. Bedding for each bed allowed by this section.
10. Pictures, oil paintings and drawings, drawn or painted by debtor and family portraits in their necessary frames.
11. One television set or radio or stereo.
12. One radio alarm clock.
13. One stove.
14. One refrigerator.
15. One washing machine.
16. One clothes dryer.
17. One vacuum cleaner.
Therefore, if the house, car and preceding household items are your only assets, it sounds like you’re judgment proof because there is nothing for the judgment creditor to take in order to satisfy the judgment. Under those circumstances, the only reason to file for bankruptcy is if you want to get the obligation out of the way and your credit repaired in 7 years. Otherwise, if you come into money in, say, 10 years the judgment creditor may pounce.
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Yes, they can garnish your wages and go after cash you have in bank accounts.
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