NCLC Report Grades States on Garnishment, Judgment Protections

A report issued last week by the National Consumer Law Center grades each state on its exemption laws, which determine how much consumers can protect from judgments and garnishments, determining that none of the 50 states or other territories meet what the organization defines as the five basic standards.

A copy of the report — No Fresh Start — can be accessed by clicking here. You can also view reports from 2021, 2020, and 2019.

The five standards that the NCLC proposes should be used by states to determine their judgment laws are:

  • Preventing creditors from seizing so much of the debtor’s wages that the debtor is pushed below a living wage;
  • Allowing the debtor to keep a used car of at least average value;
  • Preserving the family’s home — at least a median-value home;
  • Preserving a basic amount in a bank account so that the debtor’s funds to pay essential costs such as rent, utilities, and commuting expenses and to weather income and expense shocks are not cleaned out; and
  • Preventing seizure and sale of the debtor’s necessary household goods.

A ballot initiative in Arizona that passed in November and has so far survived a legal challenge from the industry pushed that state’s grade from a D to an A, but it still falls short of protecting a living wage, according to the NCLC. Massachusetts and Nevada each scored B+s from the report, while Connecticut, Washington, D.C., Maine, Puerto Rico, and Texas scored Bs, and California, New York, Oklahoma, and South Carolina scored B-s.

The worst states at protecting consumers are Georgia, Michigan, Kentucky, New Jersey, and Utah, according to the report.

“In states with weak exemption laws, working families are at risk of falling deeper into financial peril if their wages and bank accounts can be seized as they struggle to pay for heat, food, and other necessities,” said Michael Best, staff attorney at the National Consumer Law Center, in a statement. “Weak protections for the income and assets that families need imperil their health and safety, push them deeper into poverty, and can widen the racial wealth gap.”

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