As promised in our last post, this week the blog will cover the major types of funds that cannot be attached in a property or bank execution. When a judgment creditor receives permission of the court to seize property, they usually pursue funds in a bank account. A judgment creditor may also attach the personal property of the judgment debtor in an effort to satisfy the judgment. When doing so a judgment creditor must be mindful of the 21 types of property and funds that the Connecticut legislature has protected from seizure.
Before getting to the types of property/funds that are not subject to a property/bank execution it is important to note how these claims usually arise. Conn. Gen. Stat. § 52-361b makes clear that a creditor is responsible for returning any improperly seized property/funds. In practice it falls upon the judgment debtor to notify the court of the exempt property/funds and to ask that they be returned. Once the proper exemption claim is filed the courts will schedule a semi-formal evidentiary hearing where it determines the validity of the exemption claim. Every judge handles these hearings differently but generally they will hear both sides, review any documentary evidence produced and make a quick ruling. Parties can also stipulate to certain exemptions and avoid a hearing if they are so inclined.
Exempt Property/Funds – Conn. Gen. Stat. § 52-352b
The Connecticut legislature has specified 21 types of exempt property/funds which cannot be seized by a bank execution. The exempt property/funds break down into three broad categories, (1) Public Benefits, (2) Bare Necessities, and (3) Sentimental Items.
Welfare payments, Social Security, and Worker’s Compensation payments are exempt. So are veterans’ benefits, unemployment benefits, and court approved child support. Essentially, the legislature has decided that if a judgment debtor is receiving payments from the government these payments should not be diverted to pay a private debt. Monies paid to the judgment debtor under a crime reparation act are also exempt. These categories make sense as many of these payments are made to individuals who may otherwise be destitute. Allowing seizure would only frustrate the legislature’s overall goals.
The Bare Necessities
A judgment debtor also finds protection from seizure for the tools necessary for his occupation, health insurance payments, residential utility/security deposit, and a blanket $1,000.00 exemption. These categories demonstrate the legislature’s intent to keep judgment debtor’s at a minimum standard of living. While there is a public policy in favor of paying judgments there is a competing interest in making sure judgment debtors can continue to afford their basic needs.
The last broad category of exempt items are items that hold sentimental value to the judgment debtor. Put another way these, if these items or funds were seized it would look really bad on the local news. This includes family burial plots, military uniforms or weapons, wedding rings, and funds paid by under a health or disability insurance policy. Here the legislature has made the determination that whatever the objective value of these types of property/funds have it is likely to be so far outweighed by the sentimental value to the judgment debtor.
This is the category where judgment creditors must be most familiar with the law. Unlike with bank account seizure, where there can be an argument that the judgment creditor was unaware of the exempt status, here it is fairly obvious that a seized ring is a wedding ring or a uniform belongs to a veteran.