The National Consumer Law Center (NCLC) has recently surveyed the exemption laws of all fifty states, the District of Columbia, Puerto Rico, and the Virgin Islands. What NCLC found is that NOT EVEN ONE jurisdiction’s exemption laws meet basic standards of living that would allow a debtor to continue to support themselves and their family.
State exemption laws have become outdated and new legislation is not being brought or passed to bring the exemptions up to date with the current economy. The NCLC reports that in 2012 debt buyers purchased consumer accounts with an aggregate face value to $143 billion dollars for pennies on the dollar, according to the Federal Trade Commission, and much of this debt is unverifiable. States can prevent these debt buyers from leaving families in poverty if each state/jurisdiction will simply update its exemption laws.
The NCLC has made recommendations for reformation of state exemption laws. The NCLC has suggested that the laws should protect a working car, work tools and equipment, money for commuting and other daily work expenses. The law should also protect the family home, necessary household goods and means of transportation. The NCLC also suggests the laws protect a living wage for working debtors to meet basic needs and protect, at minimum, $1200 in a bank account for utility bills, etc. The law should further protect retirees by restricting the ability of creditors to seize pensions and retirement incomes and should have built-in updates for inflation. The NCLC also recommends that the law be self-enforcing to ensure that a debtor will not have to file complicated and costly paperwork or take time away from work to attend hearings.
These are all good recommendation that would certainly be welcome by debtors in all jurisdictions. If you are being pursued by a debt collector or are under any financial stress at this time, please contact our office nearest you to schedule a free consultation with one of our attorneys to discuss your situation and tell us what we can do for you.
Amy K Tanner is a shareholder in several of the Bond & Botes Law Offices. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She focuses primarily on consumer bankruptcy law in the Huntsville and Decatur offices.Read her full bio here.