SB142 - Revises provisions governing property that is exempt from execution. (BDR 2-707)

- 83rd Session (2025) Senate Bill No. 142–Senator Doñate CHAPTER.......... AN ACT relating to civil actions; requiring the Department of Taxation to adjust monetary amounts set forth in provisions governing property exempt from execution every 3 years; revising the amount of disposable earnings of a judgment debtor that is exempt from execution under certain circumstances; revising the definition of “earnings” for the purposes of provisions governing that exemption; revising the amount of money held in a personal bank account of a judgment debtor that is exempt from execution under certain circumstances; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law allows a judgment creditor to obtain a writ of execution, attachment or garnishment to levy on the property of a judgment debtor or defendant in certain circumstances. (Chapters 21 and 31 of NRS) With certain exceptions, existing law exempts certain property from execution, thereby prohibiting such property from being the subject of such a writ. (NRS 21.090- 21.105) Among the property exempt from execution, certain property is exempt only up to a specified amount. For example, payments received by a judgment debtor or by a person upon whom the judgment debtor is dependent as compensation for personal injury that are not compensation for pain and suffering or actual pecuniary loss are exempt from execution to the extent that such payments do not exceed $16,150. (NRS 21.090) Additionally, under existing law, with certain exceptions, $605,000 in equity in property designated as a homestead, including certain payments made to a defendant or spouse in that amount upon the sale of homestead property under certain circumstances, is protected from a forced sale upon execution or any final process from any court. (NRS 21.090, 115.010, 115.050, 115.055) Sections 1, 4, 5 and 8-11 of this bill require the monetary amounts set forth in the provisions of existing law governing property exempt from execution to be adjusted on April 1, 2026, and every 3 years thereafter in amount equal to the percentage of increase or decrease in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the United States Department of Labor for the period beginning on January 1 and ending on December 31 of the year immediately preceding the date of adjustment. Section 1 requires the Department of Taxation, on or before February 1 of each year in which an adjustment is required, to determine the amount of the adjustment, establish the adjusted amounts to take effect on April 1 of that year and post the adjusted amounts on the Internet website of the Department. Under existing law, the greater of the following amounts are exempt from execution: (1) 82 percent of a judgment debtor’s disposable earnings for any workweek if his or her gross weekly salary or wage on the date the most recent writ of garnishment was issued was $770 or less; (2) 75 percent of a judgment debtor’s disposable earnings for any workweek if his or her gross weekly salary or wage on the date the most recent writ of garnishment was issued exceeded $770; or (3) 50 times the federal minimum hourly wage. (NRS 21.090, 31.295) Sections 4 and 8 revise that exemption to instead exempt from execution $850 of the disposable earnings of a judgment debtor during a workweek and either 90 percent of the – 2 – - 83rd Session (2025) disposable earnings of the judgment debtor during that week that exceed $850, if the disposable earnings of the judgment debtor during that week are $1,200 or less, or 85 percent of the disposable earnings of the judgment debtor during that week that exceed $850, if the disposable earnings of the judgment debtor during that week are more than $1,200. Because sections 4 and 8 eliminate the use of a judgment debtor’s gross weekly salary or wage in determining the amount of the exception, section 12 of this bill repeals provisions setting forth the manner in which gross weekly salary or wage must be determined. For the purposes of provisions governing the exemption from execution for the disposable earnings of a judgment debtor, existing law defines: (1) “earnings” to mean compensation paid or payable for personal services performed by a judgment debtor in the regular course of business; and (2) “disposable earnings” to mean that part of the earnings of a judgment debtor remaining after the deduction from those earnings of any amounts required by law to be withheld. (NRS 21.090, 31.295) Sections 4 and 8 revise the definition of the term “earnings” to specify that the term includes compensation paid or payable for personal services performed by a judgment debtor in the regular course of business, regardless of whether the judgment debtor performed such services as an employee or independent contractor. Existing law exempts from execution: (1) $2,000 in a personal bank account if, within the 45 days immediately preceding the date on which a writ of execution or garnishment is levied on the account, money which is reasonably identifiable as exempt from execution has been electronically deposited into the account; or (2) if no such money has been deposited, $400. (NRS 21.105) Section 5 revises those exemptions to eliminate the exemption concerning money deposited within the 45 days immediately preceding the date on which the writ is levied and, instead, exempts $5,000 in a personal bank account, regardless of whether any money reasonably identifiable as exempt was deposited in the account before the writ is levied. Sections 2, 3, 6 and 7 of this bill revise the form of a writ of execution and of certain notices and interrogatories required to be served in connection with a writ of execution, attachment or garnishment, to reflect the changes set forth in sections 1, 4, 5 and 8-11. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 21 of NRS is hereby amended by adding thereto a new section to read as follows: The monetary amounts set forth in NRS 21.090, 21.105, 31.295, 115.010, 115.050 and 115.055 must be adjusted on April 1, 2026, and every 3 years thereafter, by a percentage equal to the percentage of increase or decrease in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the United States Department of Labor for the period beginning on January 1 and ending on December 31 of the year immediately preceding the date of adjustment or, if that index ceases to be – 3 – - 83rd Session (2025) published by the United States Department of Labor, the published index that most closely resembles that index, as determined by the Department of Taxation. The adjusted amount must be rounded off to the next larger integral multiple of $10. On or before February 1 of each year in which an adjustment is required pursuant to this section, the Department of Taxation shall determine the amount of the adjustment, establish the adjusted amounts to take effect on April 1 of that year and post the adjusted amounts on the Internet website of the Department. Sec. 2. NRS 21.025 is hereby amended to read as follows: 21.025 A writ of execution issued on a judgment for the recovery of money must be substantially in the following form [:] , with appropriate modifications to replace any monetary amount specified with the applicable adjusted amount established by the Department of Taxation pursuant to section 1 of this act that is in effect at the time the writ is issued: (Title of the Court) (Number and abbreviated title of the case) EXECUTION THE PEOPLE OF THE STATE OF NEVADA: To the sheriff of ................................ County. Greetings: To FINANCIAL INSTITUTIONS: This judgment is for the recovery of money for the support of a person. On ......(month)......(day)......(year), a judgment was entered by the above-entitled court in the above-entitled action in favor of ........................ as judgment creditor and against ....................... as judgment debtor for: $ ............. principal, $ ............. attorney’s fees, $ ............. interest, and $ ............. costs, making a total amount of $ ............. the judgment as entered, and – 4 – - 83rd Session (2025) WHEREAS, according to an affidavit or a memorandum of costs after judgment, or both, filed herein, it appears that further sums have accrued since the entry of judgment, to wit: $ ............. accrued interest, and $ .................. accrued costs, together with $........ fee, for the issuance of this writ, making a total of $ .................. as accrued costs, accrued interest and fees. Credit must be given for payments and partial satisfactions in the amount of $ .................. which is to be first credited against the total accrued costs and accrued interest, with any excess credited against the judgment as entered, leaving a net balance of $ .................. actually due on the date of the issuance of this writ, of which $ .................. bears interest at ........ percent per annum, in the amount of $........ per day, from the date of judgment to the date of levy, to which must be added the commissions and costs of the officer executing this writ. NOW, THEREFORE, SHERIFF OF .................................. COUNTY, you are hereby commanded to satisfy this judgment with interest and costs as provided by law, out of the personal property of the judgment debtor, except that for any workweek, [82 percent] $850 of the disposable earnings of the debtor during that week [if the gross weekly salary or wage] and either 90 percent of the disposable earnings of the debtor [on the date the most recent writ of garnishment was issued was $770] during that week that exceed $850, if the disposable earnings of the debtor during that week are $1,200 or less, [75] or 85 percent of the disposable earnings of the debtor during that week that exceed $850, if the [gross weekly salary or wage] disposable earnings of the debtor [on the date the most recent writ of garnishment was issued exceeded $770, or 50 times the minimum hourly wage prescribed by section 206(a)(1) of the federal Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq., and in effect at the time the earnings are payable, whichever is greater,] during that week are more than $1,200, is exempt from any levy of execution pursuant to this writ, and if sufficient personal property cannot be found, then out of the real – 5 – - 83rd Session (2025) property belonging to the debtor in the aforesaid county, and make return to this writ within not less than 10 days or more than 60 days endorsed thereon with what you have done. Dated: This .......... day of the month of .......... of the year .......... ..........................................., Clerk. By........................., Deputy Clerk. Sec. 3. NRS 21.075 is hereby amended to read as follows: 21.075 1. Execution on the writ of execution by levying on the property of the judgment debtor may occur only if the sheriff serves the judgment debtor with a notice of the writ of execution pursuant to NRS 21.076 and a copy of the writ. The notice must describe the types of property exempt from execution and explain the procedure for claiming those exemptions in the manner required in subsection 2. The clerk of the court shall attach the notice to the writ of execution at the time the writ is issued. 2. The notice required pursuant to subsection 1 must be substantially in the following form [:] , with appropriate modifications to replace any monetary amount specified with the applicable adjusted amount established by the Department of Taxation pursuant to section 1 of this act that is in effect at the time the writ is issued: NOTICE OF EXECUTION YOUR PROPERTY IS BEING ATTACHED OR YOUR WAGES ARE BEING GARNISHED A court has determined that you owe money to .................... (name of person), the judgment creditor. The judgment creditor has begun the procedure to collect that money by garnishing your wages, bank account and other personal property held by third persons or by taking money or other property in your possession. Certain benefits and property owned by you may be exempt from execution and may not be taken from you. The following is a partial list of exemptions: 1. Payments received pursuant to the federal Social Security Act, including, without limitation, retirement and survivors’ benefits, supplemental security income benefits and disability insurance benefits. – 6 – - 83rd Session (2025) 2. Payments for benefits or the return of contributions under the Public Employees’ Retirement System. 3. Payments for public assistance granted through the Division of Welfare and Supportive Services of the Department of Health and Human Services or a local governmental entity. 4. Proceeds from a policy of life insurance. 5. Payments of benefits under a program of industrial insurance. 6. Payments received as disability, illness or unemployment benefits. 7. Payments received as unemployment compensation. 8. Veteran’s benefits. 9. A homestead in a dwelling or a mobile home, including, subject to the provisions of NRS 115.055, the proceeds from the sale of such property, not to exceed $605,000, unless: (a) The judgment is for a medical bill, in which case all of the primary dwelling, including a mobile or manufactured home, may be exempt. (b) Allodial title has been established and not relinquished for the dwelling or mobile home, in which case all of the dwelling or mobile home and its appurtenances are exempt, including the land on which they are located, unless a valid waiver executed pursuant to NRS 115.010 is applicable to the judgment. 10. All money reasonably deposited with a landlord by you to secure an agreement to rent or lease a dwelling that is used by you as your primary residence, except that such money is not exempt with respect to a landlord or landlord’s successor in interest who seeks to enforce the terms of the agreement to rent or lease the dwelling. 11. A vehicle, if your equity in the vehicle is less than $15,000. 12. [Eighty-two percent] Eight hundred fifty dollars of the take-home pay for any workweek [if your gross weekly salary or wage was $770] and either 90 percent of the take- home pay for that workweek that exceeds $850, if the take- home pay for that workweek is $1,200 or less , [on the d [Text truncated for display. Full text available on LegiScan.]