State by State Protection
This link leads you to a list of debtor protection and creditors rights, organized by states. Most of this information was found and can be verified HERE. Please understand that this information is subject to change over time.
When considering a debt workout, a modification, or a restructuring of any kind, a guarantor and business owner should be aware what state laws and protections may be in place to protect them from collection from creditors. Likewise, they should know what right the creditors have to collect on their personal asset base. This chart is an attempt to provide some of the information necessary to understand these conditions.
Not knowing this information could lead to guarantor to lose assets that they thought were protected. For example, some people are under the assumption that all retirement accounts are protected from collection. However, if a defaulted guarantor made that mistake about their IRA in the state of California, they could lose all of their retirement savings. On the other hand, a guarantor in Texas who earns a W2 wage should be aware that wage garnishment is not possible in that state and therefore the bank’s and SBA’s opinion of the person’s future ability to repay should decrease significantly. Before entering into a workout or any other negotiation with a creditor, it is highly advised that you have your personal balance sheet reviewed for potential exposure
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