Legal Question in Credit and Debt Law in Pennsylvania

I cannot discuss your friend's siutuation with you. Your friend should get to a lawyer which he or she should have done a long time ago instead of letting it get to this point.

In general, Pennsylvania law provides certain exceptions to what a creditor can take. These are called exemptions. I have articles about exemptions in general and in Pennsylvania in particular on my website at www.rachelhunterlaw.com. I suggest your friend read up there.

Basically, if your friend is married and owns everything jointly with his or her spouse and a judgment is just against the friend, then the sheriff is precluded from taking anything that is jointly owned marital property be it personal or land.

If the friend is unmarried, then there are exemptions only for clothes/uniforms, a Bible, sewing machine and no more than $300 in any one bank account. If the friend gets something like Social Security, then this monetary limit does not apply. Social Security money cannot be seized and banks will protect up to 60 days' worth by federal law/rule. Same is true for things like unemployment benefits, workers's compensation, veterans' benefits or retirement. One would have to see a lawyer to go over specifically what assets the friend has.

There is no wage garnishment in Pennsylvania for most debts. However, once wages hit a bank account they can be seized as they cease to be wages.

Your friend needs to think about resolving this debt in some way. If your friend owes more than $10,000 in dischargeable debt, maybe bankruptcy is an option. If this is the only debt and its under $10,000, then maybe settlement is an option. Who is the creditor and creditor law firm and what is the debt for? Many creditors will settle a post-judgment debt for 50% to 80% on average. Again, specifics depend on who it is and how much money the friend has to resolve it.

These are the Pennsylvania Exemptions:

42 Pa.C.S.A. � 8123. General monetary exemption

Currentness

(a) General rule.--In addition to any other property specifically exempted by this subchapter, property of the judgment debtor (including bank notes, money, securities, real property, judgments or other indebtedness due the judgment debtor) to the value of $300 shall be exempt from attachment or execution on a judgment. Within such time as may be prescribed by general rules the judgment debtor may claim the exemption in kind and may designate the specific items of property to which the exemption provided by this section shall be applicable unless the designated property is not capable of appropriate division, or the judgment debtor may claim the exemption in cash out of the proceeds of the sale.

(b) Exception.--Subsection (a) shall not apply to any judgment:

(1) For support.

(2) Debtor who is not an individual.

(3) Obtained for board for four weeks or less.

(4) For $100 or less obtained for wages for manual labor.

(5) Obtained in foreclosing a mortgage secured upon real property whether the judgment is by an action in mortgage foreclosure or an action on a note, bond or other evidence of indebtedness accompanying a mortgage. The exception to the general monetary exemption provided for in this paragraph shall be limited to the real property secured by the mortgage. The exception shall not apply to any deficiency judgment.

(c) Executions issued by minor judiciary.--As to executions issued by the minor judiciary the amount of the exemption specified in subsection (a) shall be reduced by the value of any real or personal property of the judgment debtor which is generally subject to attachment or execution but which by law is not subject to attachments or executions issued by the minor judiciary.

42 Pa.C.S.A. � 8124. Exemption of particular property

(a) Goods.--The following personal property of the judgment debtor shall be exempt from attachment or execution on a judgment:

(1) Wearing apparel.

(2) Bibles and school books.

(3) Sewing machines belonging to seamstresses or used and owned by private families, but not including sewing machines kept for sale or hire.

(4) Uniforms and accoutrements as provided by 51 Pa.C.S. � 4103 (relating to exemption of uniforms and equipment).

(b) Retirement funds and accounts.--

(1) Except as provided in paragraph (2), the following money or other property of the judgment debtor shall be exempt from attachment or execution on a judgment:

(i) Certain amounts payable under the Public School Employees' Retirement Code as provided by 24 Pa.C.S. � 8533 (relating to taxation, attachment and assignment of funds).

(ii) Certain amounts payable under the State Employees' Retirement Code as provided by 71 Pa.C.S. � 5953 (relating to taxation, attachment and assignment of funds).

(iii) The retirement allowance provided for in the act of May 24, 1893 (P.L. 129, No. 82).

(iv) Compensation or pension provided for in the act of May 20, 1915 (P.L. 566, No. 242).

(v) Compensation or pension provided for in the act of May 28, 1915 (P.L. 596, No. 259).

(vi) The retirement allowance, contributions and returned contributions under the act of February 1, 1974 (P.L. 34, No. 15), known as the �Pennsylvania Municipal Retirement Law.�

(vii) Any pension or annuity, whether by way of a gratuity or otherwise, granted or paid by any private corporation or employer to a retired employee under a plan or contract which provides that the pension or annuity shall not be assignable.

(viii) Any retirement or annuity fund of any self-employed person (to the extent of payments thereto made while solvent, but not exceeding the amount actually excluded or deducted as retirement funding for Federal income tax purposes) and the appreciation thereon, the income therefrom and the benefits or annuity payable thereunder.

(ix) Any retirement or annuity fund provided for under section 401(a), 403(a) and (b), 408, 408A, 409 or 530 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. � 401(a), 403(a) and (b), 408, 408A, 409 or 530), the appreciation thereon, the income therefrom, the benefits or annuity payable thereunder and transfers and rollovers between such funds. This subparagraph shall not apply to:

(A) Amounts contributed by the debtor to the retirement or annuity fund within one year before the debtor filed for bankruptcy. This shall not include amounts directly rolled over from other funds which are exempt from attachment under this subparagraph.

(B) Amounts contributed by the debtor to the retirement or annuity fund in excess of $15,000 within a one-year period. This shall not include amounts directly rolled over from other funds which are exempt from attachment under this subparagraph.

(C) Amounts deemed to be fraudulent conveyances.

(2) The exemptions provided by paragraph (1)(i) through (vi) shall be subject to any inconsistent provision of the act of July 8, 1978 (P.L. 752, No. 140), known as the �Public Employee Pension Forfeiture Act.�

(c) Insurance proceeds.--The following property or other rights of the judgment debtor shall be exempt from attachment or execution on a judgment:

(1) Certain amounts paid, provided or rendered by a fraternal benefit society as provided by 40 Pa.C.S. � 6531 (relating to benefits not attachable).

(2) Claims and compensation payments under the act of June 2, 1915 (P.L. 736, No. 338), known as �The Pennsylvania Workmen's Compensation Law,� except as otherwise provided in the act.

(3) Any policy or contract of insurance or annuity issued to a solvent insured who is the beneficiary thereof, except any part thereof exceeding an income or return of $100 per month.

(4) Any amount of proceeds retained by the insurer at maturity or otherwise under the terms of an annuity or policy of life insurance if the policy or a supplemental agreement provides that such proceeds and the income therefrom shall not be assignable.

(5) Any policy of group insurance or the proceeds thereof.

(6) The net amount payable under any annuity contract or policy of life insurance made for the benefit of or assigned to the spouse, children or dependent relative of the insured, whether or not the right to change the named beneficiary is reserved by or permitted to the insured. The preceding sentence shall not be applicable to the extent the judgment debtor is such spouse, child or other relative.

(7) The net amount payable under any accident or disability insurance.

(8) Certain amounts paid, provided or rendered by a fraternal benefit society as provided by section 305 of the act of July 29, 1977 (P.L. 105, No. 38), known as the �Fraternal Benefit Society Code.�

(9) Certain amounts paid, provided or rendered under the provisions of section 106(f) of the act of July 19, 1974 (P.L. 489, No. 176), known as the �Pennsylvania No-fault Motor Vehicle Insurance Act.�

(10) Certain amounts paid, provided or rendered under the provisions of section 703 of the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L. 2897, No. 1), known as the �Unemployment Compensation Law.�