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According to a report released by the National Consumer Law Center, state laws vary as far as affording protection from creditors is concerned. The advocacy group found that few places had adequate exemption laws, or laws designed to protect families from losing all they own to creditors. Few states met five basic standards of consumer protection, including preserving at least $1,000 in the bank and preventing creditors from seizing vehicles, homes, household goods and most wages.

In some states, exemption laws remain weak and outdated. For example, Pennsylvania has laws protecting bibles, livestock and sewing machines, but nothing to protect household goods worth more than $300. Advocates say that states need to update their laws; however, many are doing so in small, piecemeal steps such as protecting the family car but draining savings allocated toward insuring the car.

Exemption laws come into effect when creditors win judgments against consumers in court because they are permitted to move forward in order to seize property or wages to pay debts. The debt collection industry is critical of debtor advocates and believes that the priority should be on understanding and managing finances rather than absolution. However, according to a 2011 report by Consumers Union, debt collectors that had been filing lawsuits against borrowers failed to provide proper documentation. In some instances, people were being sued over previously settled debts. Additionally, companies won court judgments for debts without proof.

Harassing calls from debt collectors can be intimidating, and those on the receiving end may be afraid of losing their homes and possessions. Florida has bankruptcy laws protecting consumers, and an attorney may be able to explain the law and the manner in which it can help those seeking protection from creditors. An attorney may be able to offer options that will enable those who struggle with debt keep their residences and possessions.

Source: Washington Post, “State laws offer consumers varying degrees of protections from creditors, report says“, Danielle Douglas, October 09, 2013