Using Florida Exemptions for Property Located in Other States

Florida residents that own real or personal property in other states often wonder whether Florida’s generous exemptions from creditors can be asserted in courts located outside of Florida.

For example, suppose a judgment debtor has a judgment entered against him in New York. The debtor lives and works in Florida. He supports his wife. His employer has offices in Florida and New York, and the employer pays the debtor from the Florida office where the client is employed.

The creditor causes the New York court to issue a writ of wage garnishment, and it serves a writ of garnishment against the employer at its New York office.

Florida statutes state that a judgment creditor cannot garnish the earnings of a Florida resident that is head of household. But New York has no such garnishment exemption. What does the judgment debtor do?

There is little law on this issue in Florida and elsewhere. Most courts that have addressed this issue have held that a debtor’s exemptions of personal property are determined by the law of the state where the judgment is issued and enforced—not where the debtor resides.

Assets located in Florida, including Florida homestead and other real property, are subject only to Florida exemption law. For a foreign state’s exemption laws to apply instead of Florida’s, the asset must be outside Florida.

In the above example, the “assets” are the wages owed to the judgment debtor. By serving the continuing writ of garnishment issued by the New York court onto the New York office of the employer, the judgment creditor would argue that the wages are owed by the company located in New York, which is therefore subject to New York garnishment law. It would not matter that the judgment debtor himself lives in Florida.

Furthermore, the Florida judgment debtor would be at a tactical disadvantage in having to defend the wage garnishment up in New York. He would have to hire New York counsel, who would then have to attempt to convince a New York judge that the New York court should apply Florida law in a New York garnishment proceeding. Probably a tough sell.

In some cases, it is possible to restructure an employment relationship such that wages are paid and owed by Florida entities, forcing the judgment creditor to bring a wage garnishment in a Florida court (where Florida exemptions would apply).

In general, be aware that Florida exemptions do not protect your personal property against judgments in other states. A creditor with a foreign judgment could, for example, attempt to levy upon your retirement accounts or your tenants by entireties accounts unless these assets are located inside the state of Florida.

This is not a frequent problem because most Florida residents are sued in Florida courts because their creditors cannot establish personal jurisdiction over them in any other state. People doing business outside Florida, however, may subject themselves and many of their assets to the laws of other states.