House Study Bill 503 HOUSE FILE BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON PAULSEN) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to exemptions for certain personal property from 2 execution by creditors in state court debt collection and 3 federal bankruptcy actions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5205YC 81 6 rh/je/5 PAG LIN 1 1 Section 1. Section 627.6, subsections 1, 5, 9, and 13, 1 2 Code 2005, are amended to read as follows: 1 3 1.All wearing apparel of the debtor and the debtor's 1 4 dependents kept for actual use and the trunks or other 1 5 receptacles necessary for the wearing apparel, not to exceed 1 6 in value one thousand dollars in the aggregate. In addition, 1 7 theThe debtor's interest in: 1 8 a.anyAny wedding or engagement ring ownedandor 1 9 received by the debtor or the debtor's dependents on or before 1 10 the date of marriage. In addition, any interest in one or 1 11 more wedding or engagement rings owned or received by the 1 12 debtor and the debtor's dependents after the date of marriage 1 13 but within two years of the date of execution is issued or an 1 14 exemption is claimed, not to exceed a value equal to seven 1 15 thousand dollars in the aggregate minus the amount claimed by 1 16 the debtor and the debtor's dependents for any other jewelry 1 17 claimed in paragraph "b". 1 18 b. All jewelry of the debtor and the debtor's dependents 1 19 owned or received by the debtor and the debtor's dependents, 1 20 not to exceed in value two thousand dollars in the aggregate. 1 21 5. The debtor's interest in all wearing apparel of the 1 22 debtor and the debtor's dependents kept for actual use and the 1 23 trunks or other receptacles necessary for the wearing apparel, 1 24 musical instruments, household furnishings, and household 1 25 goodsandwhich include, but are not limited to, appliances, 1 26 radios, television sets, record or tape playing machines, 1 27 compact disc players, satellite dishes, cable television 1 28 equipment, computers, software, printers, digital video disc 1 29 players, video players, and cameras held primarily for the 1 30 personal, family, or household use of the debtoror a 1 31 dependent of the debtorand the debtor's dependents, not to 1 32 exceed in valuetwoseven thousand dollars in the aggregate. 1 33 9.Any combination of the following, not to exceed a value 1 34 of five thousand dollars in the aggregateThe debtor's 1 35 interest in the following: 2 1 a.Musical instruments, not including radios, television 2 2 sets, or record or tape playing machines, held primarily for 2 3 the personal, family, or household use of the debtor or a 2 4 dependent of the debtor.2 5b.One motor vehicle, not to exceed in value five thousand 2 6 dollars in the aggregate. 2 7c.b. In the event of a bankruptcy proceeding, the 2 8 debtor's interest in accrued wages and in state and federal 2 9 tax refunds as of the date of filing of the petition in 2 10 bankruptcy, not to exceed one thousand dollars in the 2 11 aggregate. This exemption is in addition to the limitations 2 12 contained in sections 642.21 and 537.5105. 2 13 13. The debtor's interest, not to exceed onehundred2 14 thousand dollars in the aggregate, in any cash on hand, bank 2 15 deposits, credit union share drafts, or other deposits, 2 16 wherever situated, or other personal property not otherwise 2 17 specifically provided for in this chapter. 2 18 Sec. 2. Section 627.6, Code 2005, is amended by adding the 2 19 following new subsection: 2 20 NEW SUBSECTION. 15. The debtor's interest in the 2 21 following payments reasonably necessary for the support of the 2 22 debtor or the debtor's dependents: 2 23 a. Payments to or for the benefit of the debtor or the 2 24 debtor's dependents resulting from the wrongful death of a 2 25 decedent upon which the debtor or the debtor's dependents were 2 26 dependent. 2 27 b. Payments compensating the debtor or the debtor's 2 28 dependents for injuries to the debtor or the debtor's 2 29 dependents. Such payments shall not include payments for pain 2 30 and suffering, compensation of actual pecuniary loss, lost 2 31 wages, psychological or emotional distress, sexual harassment, 2 32 and employment discrimination. 2 33 EXPLANATION 2 34 This bill relates to exemptions for certain personal 2 35 property from execution by creditors in state court debt 3 1 collection and federal bankruptcy actions. 3 2 The bill provides that any exempt wedding or engagement 3 3 rings owned or received by a debtor and a debtor's dependents 3 4 after marriage but within two years of the date execution is 3 5 issued by a creditor or an exemption is claimed by the debtor 3 6 and the debtor's dependents shall not exceed a value of $7,000 3 7 in the aggregate minus up to $2,000 for any other jewelry 3 8 claimed by the debtor and the debtor's dependents. The 3 9 current unlimited exemption for any wedding or engagement ring 3 10 owned or received by a debtor and a debtor's dependents prior 3 11 to or on the date of marriage remains intact. 3 12 The bill specifies that the debtor and the debtor's 3 13 dependents' interest in wearing apparel and household goods, 3 14 including but not limited to radios, television sets, record 3 15 or tape playing machines, compact disc players, satellite 3 16 dishes, cable television equipment, computers, software, 3 17 printers, digital video disc players, video players, and 3 18 cameras held primarily for personal, family, and household use 3 19 of the debtor and the debtor's dependents shall not exceed 3 20 $7,000 in the aggregate. Current law separately limits the 3 21 wearing apparel exemption to $1,000 and household goods 3 22 exemption to $2,000. 3 23 The bill allows a debtor to claim an exemption on a motor 3 24 vehicle not to exceed a value of $5,000 in the aggregate. 3 25 Current law places no limitation on such an exemption. 3 26 The bill increases the amount of the debtor's interest in 3 27 any cash on hand, bank deposits, credit union share drafts, or 3 28 other deposits or other personal property from $100 to $1,000. 3 29 The bill creates a new exemption relating to a debtor's 3 30 interest in support payments to include payments to or for the 3 31 benefit of the debtor and the debtor's dependents resulting 3 32 from the wrongful death of a decedent upon which the debtor 3 33 and the debtor's dependents were dependent and payments 3 34 compensating the debtor and the debtor's dependents for 3 35 injuries to the debtor and the debtor's dependents, other than 4 1 for pain and suffering, compensation of actual pecuniary loss, 4 2 lost wages, psychological or emotional distress, sexual 4 3 harassment, and employment discrimination. 4 4 LSB 5205YC 81 4 5 rh:rj/je/5