Money judgment collection is typically controlled at the state level. Moreover, states have their own peculiarities baked into their laws. Take the state of Idaho. Whether a judgment creditor wishes to exercise judgment liens or writs of execution, the principle of actionable equity needs to be considered.
Actionable equity dictates how much value associated with a targeted property can be leveraged for collection purposes. If a property has no actionable equity, it is of very little value to a judgment creditor.
The Basic Principle of Equity
The easiest way to understand equity is to consider it the value of a property above and beyond any debts related to it. Think of your own home. If the outstanding balance on your mortgage is $100K while the real value of your property is $150K, you have $50K in equity.
In the state of Idaho, that equity might be available for debt collection under the state’s homestead exemption rules. It is not much on a sizable judgment amount, but it is at least something a judgment creditor could look at.
Automatic Judgment Liens
Idaho law offers another peculiarity in automatic judgment liens. When a money judgment is properly recorded in the state, it automatically creates a lien on the debtor’s real property. This is land, houses, and buildings located in the same county where the judgment was recorded.
The benefit of automatic liens to judgment creditors should be obvious. A judgment creditor does not have to go through the process of filing the lien himself. From the debtor’s standpoint, automatic liens can be quite motivating.
Note that automatic liens do not apply to personal property like vehicles, household goods, and bank accounts. A judgment creditor seeking to leverage personal property for collection purposes must ask for and execute a specific writ of execution on each asset.
Actionable Equity and Exemption Amounts
Getting back to the principle of actionable equity, the rules in Idaho grant generous exemptions on all sorts of property. An exemption protects a certain value of a given property against collection efforts. Check out the following five categories:
- Homestead – Up to $175K of a debtor’s primary residence is protected against collection. This applies to standard homes, manufactured and mobile homes, and associated lands.
- Motor Vehicle – Up to $10K of a single motor vehicle is exempt. Recreational vehicles are not included in this exemption.
- Household Goods – A debtor’s household goods are exempted up to $7,500. No single item can be exempted at more than $1,000.
- Tools of the Trade – Any tools, equipment, and implements necessary to a debtor’s occupation are protected up to $10K in aggregate value.
- Retirement Funds – Though there are rare exceptions to the rule, retirement funds are generally off limits. They are fully exempt from all collection efforts.
Given how important debtor assets are to judgment collection, it is important that Idaho creditors understand both exemption limits and actionable equity. Once exemption limits are applied, there may not be enough equity remaining to make a particular asset worth pursuing.
We Make Collection Easier
Are you attempting to collect an Idaho money judgment? If so, do you find all this confusing? Perhaps it’s time to consider turning your judgment over to Judgment Collectors. We make collection easier by doing all the work for you.
We work on consignment, meaning you do not pay a dime unless we collect. By turning your judgment over to us, you can get back to more important things. You can also stop spending money and time pursuing a judgment debtor who isn’t trying very hard to cooperate with you.