Florida Asset Protection : Asset Protection Law & Planning in Florida - Florida Homestead Exemption

I have had a few discussions during this past week about creditor's ability to garnish wages of judgment debtors who are not head of household and who do not qualify for Florida's wage garnishment exemptions. If you are not head of household the Florida statutes permit creditors to garnish your wages. Garnishment is limited to amounts otherwise provided by federal wage garnishment laws. Federal law permits garnishment of 25% of the debtor's net earnings.

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A mortgage lender has the option to pursue a deficiency judgment following a foreclosure. Many people have asked me how long does the mortgage lender have to decide whether or not to get a deficiency judgment. Otherwise stated, what is the statute of limitations applicable to deficiency judgments. I do not practice civil litigation and have no personal experience litigating mortgage deficiency proceedings. I referred the question to a professional colleague who is involved in real estate and lender litigation. He said that there is a four year statute of limitations on deficiency judgments. If so, a lender has up to four years after a foreclosure judgment to file an action for a deficiency judgment against the borrower. As a practical matter, most lenders decide whether or not to seek a deficiency shortly after the foreclosure is complete. It is possible, but unlikely, a borrower will face a deficiency action years after the foreclosure judgment.

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A man worked as an executive for a public company and received compensation in the form of stock in his employer company. His stock certificates were restricted. He could not sell the stock certificates for three years, and he could not assign the certificates. Only the employee could redeem the certificates for cash, and could do so any time during his lifetime. He could not bequeath the stock to his heirs. The man asked me whether a creditor could levy on his stock certificates.

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I get frequent calls from people whose checking accounts have been improperly garnished by creditors. Sometimes a individual debtor has an account owned jointly with his spouse as tenants by entireties which account is exempt from creditors of either individual spouse. In other cases, a caller states that the account contains wages and that he is head of household. This money, too, is exempt. Some creditors do not know your bank account has exempt money. For example, when the creditor sees an account in the debtor's individual name the creditor does not know ( or does not want to know) that it's a wage account. Creditors that garnish joint accounts often do not know (or do not care) that the money may be exempt. Remember, not all accounts owned jointly with your spouse qualify for entireties accounts; there are exceptions. For example, if husband and wife do not put their names on the account at the same time, or if the current spouses first opened the account before they were married, the account technically is not a protected entireties account. When a creditor improperly garnishes a protected bank account it is up to the debtor to get a court order dissolving the garnishment.

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In the current real estate recession many of my new clients are investors who purchased too many residential rental properties too late in the market cycle. Most of these people are frustrated because their mortgage lender will not negotiate to adjust payments until the market improves. They also fear the lender's active pursuit of deficiency judgments if there is a foreclosure. This past week I discussed the current mortgage and real estate situation with a man with over 25 years in the mortgage lending and banking business. What he told me may interest some of you.

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Florida statutes protect from creditors annuities and annuity proceeds. Courts have liberally applied the protection of annuity proceeds to any money in a debtor's financial accounts traceable to an annuity. The term "annuity" is not defined in Florida statutes. What is and what is not an annuity can be confusing. For example, this past week I evaluated a client's severance package from a national financial firm. The firm agreed in writing to pay the retired client $65,000 each year in monthly installments for the balance of his lifetime. The client asked me whether these payments could be protected under Florida's exemption statutes.

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