When Should I File a Declaration of Exempt Income and Assets?
Authored By: Northwest Justice Project
Use this packet ONLY if you are sure that your income and assets cannot be garnished. Use this packet with the Answering a Lawsuit for Debt Collection - Interactive Forms, Debtors' Rights in a Lawsuit and How to Answer a Lawsuit for Debt Collection publications. #0206EN
- Should I use this?
- I have been sued for a debt. Do I need to respond?
- What if I do not answer the Complaint?
- Someone told me that I am "collection proof." What does that mean?
- How do I know I am "collection proof?"
- What is a Declaration of Exempt Income and Assets?
- When should I file a Declaration re: Income and Assets Exempt from Garnishment?
- How do I fill out the Declaration of Exempt Income and Assets?
- Get Legal Help
*Read this only if you live in the state of Washington.
Should I use this?
Yes, but only if you are sure your income and assets cannot be garnished. Money that cannot be taken from you (“garnished”) to pay off a debt has more information.
*This packet is not a substitute for representation by a lawyer. Try to talk to or hire one before answering a lawsuit.
Use this packet with How to Answer a Lawsuit for Debt Collection.
We also have an online interview program called Answer a Lawsuit for Debt Collection that creates the court forms. You can use this program instead of the How to Answer a Lawsuit for Debt Collection packet if you do not want to handwrite your forms. The declaration form attached to this packet is not in the online interview. A link to the interview is on the home page of WashingtonLawHelp.org in the Do-it-Yourself Forms area in the right sidebar.
I have been sued for a debt. Do I need to respond?
Yes, if you want to defend (fight) the lawsuit/complaint. If you do not file an Answer (formal written response to the lawsuit), the court will enter a Default Judgment against you. This means the court will rule in favor of the plaintiff (person who is suing you).
If you want to get notice of the status of the case or of when the court actually enters judgment against you, you must file a Notice of Appearance.
What if I do not answer the Complaint?
The plaintiff will win automatically. Plaintiff will get a judgment for everything Plaintiff’s complaint asked for.
Someone told me that I am "collection proof." What does that mean?
It means that even though the court has entered a judgment against you, the creditor cannot collect on the judgment. They cannot take any of your money.
How do I know I am "collection proof?"
By law, creditors cannot garnish or take certain types of income or money from you to pay off a debt. The most common types of income exempt from garnishment are (see a full list on the declaration form):
Supplemental Security Income (SSI) benefits
Temporary Assistance for Needy Families (TANF) benefits
Aged, Blind, or Disabled (ABD) benefits
Child support you receive
Veteran’s Administration (VA) benefits
Federal student Loans
All or part of your wages, depending on how much you earn and what you are being sued for
- Consumer debt. This means debts from credit cards, doctor bills, hospital bills, utility bills, phone bills, personal loans from a bank or credit union, debts owed to a landlord or former landlord, or any other debt for personal, family, or household purposes.
If you are sued on a consumer debt, creditors cannot take any of your wages if you earn less than $479.15 weekly (35x the state minimum hourly wage). If you earn more than this amount, you may still keep 35x the state minimum hourly wage or 80% of your net pay, whichever is more.
*Net pay is your earnings after subtracting mandatory deductions.
*Mandatory deductions include Social Security, Medicare, and federal income taxes.
Private student loan debt—If you are sued on a private student loan debt, creditors cannot take any of your wages if you earn less than $834.50 weekly (50x the highest minimum hourly wage in the State). If you earn more than this, you may still keep 50x the highest minimum hourly wage in the State or 85% of your net pay, whichever is more.
Other debts—If you are sued on other debts that are not consumer or private student loan debts, creditors cannot take any of your wages if you earn less than $253.75 weekly (35x the federal minimum hourly wage). If you earn more than this amount, you may still keep 35x the federal minimum hourly wage or 75% of your net pay, whichever is more.
The law also exempts (protects) some property:
- Your home, where the equity value is the greater of (a) $125,000; or (b) the county median sale price of a single-family home in the preceding calendar year.
*Equity is the amount of money you would keep after you sold your home and paid off the mortgage and other liens. You can find the median sale price of homes in your county online here.
Clothing—up to $3,500 in value
Household goods—up to $6,500 per person or $13,000 for a married couple
A cell (mobile) phone, personal computer, and printer
A car—equity in your car is exempt up to $3,250 (or 2 cars for a married couple up to $6,500 in total value)
Money in your bank account
$2,500 is exempt if your only judgment is for private student loan debt.
$2,000 is exempt if the judgment if for consumer debt.
$500 in your bank account is exempt for all other debts (and $1,000 additional cash, for a total exemption of up to $1,500)
What is a Declaration of Exempt Income and Assets?
A declaration is a sworn statement. The Declaration of Exempt Income and Assets lets your creditors know you have income and/or assets they may not take from you.
*You can use the blank Declaration of Exempt Income and Assets in this packet.
When should I file a Declaration re: Income and Assets Exempt from Garnishment?
Only when you know for sure your income and assets are exempt.
Income (#4): Only check the box (or boxes) that apply to you and the type of income you get. Example: You receive Social Security Disability (SSDI) and Child Support payments. Only put check marks in those 2 boxes.
Assets (#5): Check every box that applies.
Example: If you do not own a home and are renting, do not check the homestead box.
Example: If you think your clothing, books, video games and DVDs, household goods, and other personal property are worth less than the amounts stated on the Declaration form, you should check those boxes.
Example: If the car you own may be worth more than $3,250 (the amount stated on the Declaration form), you can still check the box for motor vehicles, but if your car is worth thousands more than that, a creditor could try to sell it. The creditor would have to give you the first $3,250 from the sale before taking anything to collect on the judgment.
Last part of the declaration: Sign the declaration. Put the date you signed. Signing guarantees that all information in the declaration is true.
*Creditors are very good at finding out what assets and income you have. Be honest in this declaration.
Do not attach any documents to the Declaration.
You can file the Declaration with the Court and send it to Plaintiff or Plaintiff’s attorney, if there is one, at the same time you file your Notice of Appearance and/or Answer. See How to Answer a Lawsuit for Debt Collection or the online Answer a Lawsuit for Debt Collection interview program.
Get Legal Help
Visit Northwest Justice Project to find out how to get legal help.