Protect Your Property and Income from Debt Collectors

Vermont law protects some property and income from being taken by courts or by creditors trying to collect a debt. These are called exemption laws.

Exemption laws let you keep property and income you need to support yourself and your family. A court or creditor cannot take your exempt property or force you to sell it. A court or creditor cannot make you pay a debt with exempt income.

If you are sued, the court might make a court order that says you owe the money. This is called a Judgment. But the Judgment does not mean you have to make payments. If your income and property are exempt, you do not have to make payments on the Judgment.

If you are sued in Small Claims Court, the first court paperwork will ask if you want to make payments. You may agree to pay the debt under any terms you wish. Find out more about defending yourself in court against debt collection.

But before you agree to repayment, you should know that you cannot be forced to pay a debt out of exempt income or property. If your income is exempt and you cannot afford to pay, you should not agree to make payments.

Federal law also protects a certain amount of your Social Security and VA benefits from garnishment to pay a debt to a private person or company. Here’s how the federal protection works:

Banks must automatically check your account history to see if Social Security or VA benefits were direct-deposited to your account in the last 2 months.
If so, your bank must protect 2 months’ worth of benefits in your account and let you use that money.
If your account has more than 2 months’ worth of benefits, your bank can freeze the extra money.

Learn more on our Frozen Bank Account page.

Learn how your Social Security and VA benefits are protected on the Consumer Financial Protection Bureau’s website. It includes a sample letter to tell a debt collector that your Social Security or VA benefits are protected from garnishment. You can also download and print this helpful summary.

More Information

Read this important information about how to protect your property and income from debt collectors. It will tell you more about the most important exemptions that protect your property and income under Vermont and federal law.
Use our sample letter to tell collection agencies to stop calling you.
You can also check out the Vermont Attorney General's website.