Several categories of assets are generally protected from collection by judgment creditors for unsecured debt: federal benefits (Social Security, VA, federal pensions), tax-advantaged retirement accounts (401(k), IRA, pension funds), state-specific homestead exemption protecting your primary residence, life insurance with named beneficiaries, and a portion of your wages. The exact protections vary significantly by state, with Florida and Texas offering the most generous debtor protections.
Federal benefits. Social Security retirement and disability, SSI, VA benefits, federal pensions, and federal employee retirement are protected from garnishment for consumer debts under 42 U.S.C. ยง 407 and similar federal statutes. Banks must protect two months of these benefits in your account from levy, even after a judgment. Federal benefits remain protected when commingled with other funds, as long as the bank can identify the benefit deposits.
Retirement accounts. ERISA-qualified retirement plans (401(k), 403(b), pensions, profit-sharing plans) have very strong federal protection from creditors under ERISA Section 206(d). IRAs (traditional and Roth) are protected up to $1.5 million in bankruptcy under federal law and have varying state-law protection outside bankruptcy. State law generally provides additional protection for these accounts.
Homestead exemption. Your primary residence is protected from forced sale by judgment creditors up to a certain equity amount, varying dramatically by state: Florida and Texas (unlimited equity), Massachusetts ($1 million), California ($300,000-$600,000 depending on county), Pennsylvania ($300). Above the homestead amount, any equity is potentially vulnerable. Mortgages and property tax liens can still force sale regardless of homestead.
Wage protection. Federal law (Consumer Credit Protection Act) caps wage garnishment at 25% of disposable income or the amount above 30 times federal minimum wage, whichever is less. Several states are more protective: Texas (no garnishment for most consumer debt), Pennsylvania (no garnishment for most consumer debt), North Carolina (no garnishment for consumer debt), South Carolina (no garnishment for consumer debt). Florida exempts head of household with dependents from garnishment.
Bank account exemptions. A portion of bank account funds is generally exempt from levy. The amount varies by state and can be tied to wages or specific exemptions. Federal benefits in bank accounts are protected for two months. Some states have a general bank account exemption (e.g., $2,000 in California) that protects basic checking funds.
Personal property exemptions. Most states protect basic personal property from creditor seizure: clothing, household goods, basic appliances, tools of trade (up to certain amounts), and personal effects. Some states have specific dollar caps; others use "reasonably necessary" standards. Wedding rings and certain heirlooms are often specifically exempt.
Vehicle exemptions. Most states protect equity in one vehicle up to a certain amount, ranging from $1,000 (older limits) to $20,000+ (more generous states). The exemption applies to one vehicle (usually the primary one). Equity above the exemption can be reached, though forcing sale of a vehicle usually nets the creditor very little after auction costs.
Life insurance. Many states protect life insurance proceeds and cash surrender values from creditors, especially if the policy has named beneficiaries. The protection varies by state and policy type. Whole-life cash values are sometimes more protected than term-life death benefits.
Spousal protections. Some states (community property states) treat marital assets differently from separate assets. A judgment against one spouse may not reach assets held only in the other spouse's name. Some non-community-property states provide "tenancy by entirety" protection for jointly-held real estate (assets held jointly by spouses are protected from individual creditors of one spouse).
State-specific resources. Each state has a published list of exemptions in the state code. Search "[your state] judgment exemptions" or "[your state] debtor exemptions" to find the specific list. Consulting a local consumer-protection attorney for a one-time evaluation is worth the small fee if you have significant assets to protect.
Bankruptcy as ultimate protection. If creditor pressure is severe and assets are at risk, Chapter 7 bankruptcy provides the strongest possible protection: most unsecured debts are discharged, and most exempt assets are retained through the bankruptcy. The federal exemption schedule or state exemption schedule (varies by state) determines what you keep.