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Collection Actions: 10.4.3.2 Installment Agreements

The IRS allows a taxpayer to pay taxes that are owed in monthly installments. A taxpayer who owes less than $50,000 has up to seventy-two months to pay, and one who owes between $50,001 and $100,000 has up to eighty-four months to pay.

Collection Actions: 17.3.2 Exceptions to the Prohibition

Many of the state prohibitions make an exception for nonpayment of judgments involving fraud34 or tort.35 Some states allow imprisonment for debt when the debtor is about to leave the jurisdiction,36 or when the debtor “refuses to deliver up his estate for the benefit of his creditors.”37 A number of states restrict the protection to civil actions.38

Collection Actions: 17.3.4 Federal Constitutional Limits on Punishment for Contempt

The U.S. Constitution places some limits on imprisoning a judgment debtor on a contempt charge for failing to abide by a payment order. In evaluating what the Constitution requires, the first question is whether the debtor is being imprisoned for civil contempt or criminal contempt—that is, whether it is remedial or punitive.

Collection Actions: Exemptions in Bankruptcy Proceedings

This appendix includes a series of questions and answers for each state designed to help determine the applicable exemption law for purposes of 11 U.S.C. § 522(b)(3)(A) in a debtor’s bankruptcy proceeding. Which state’s exemption law applies is determined by the debtor’s domicile.

Collection Actions: ALABAMA

Has state opted out of federal bankruptcy exemptions? Yes. Ala. Code § 6-10-11.

Is opt out limited to residents or domiciliaries of the state? Not specified, but probably yes. Ala. Code § 6-10-11: “In cases instituted under [Title 11] there shall be exempt . . . only that property . . . exempt under the laws of Alabama and under [federal laws other than § 522(d)].” See In re Walley, 9 B.R. 55 (Bankr. S.D. Ala. 1981) (opt-out statute applies only to Alabama residents).

Collection Actions: ARKANSAS

Has state opted out of federal bankruptcy exemptions? No. Ark. Code Ann. § 16-66-217.

Is opt out limited to residents or domiciliaries of the state? Not applicable.

Do state’s exemptions have extraterritorial application?

Homestead: Probably not. Ark. Code Ann. § 16-66-210 limited to homestead “of any resident of this state.” See Cherokee Constr. Co. v. Harris, 122 S.W. 485 (Ark. 1909).

Personal property: Uncertain.

Collection Actions: DISTRICT OF COLUMBIA

Has state opted out of federal bankruptcy exemptions? No.

Is opt out limited to residents or domiciliaries of the state? Not applicable.

Do state’s exemptions have extraterritorial application?

Homestead: Yes (with limitations). D.C. Code § 15-501(a) provides that specified property of a head of family or householder, who resides in the District of Columbia or who earns the major portion of his livelihood there, is exempt “regardless of his place of residence.”

Collection Actions: FLORIDA

Has state opted out of federal bankruptcy exemptions? Yes, except as to exemptions provided by 11 U.S.C. § 522(d)(10). Fla. Stat. §§ 222.20, 222.201.

Collection Actions: IDAHO

Has state opted out of federal bankruptcy exemptions? Yes. Idaho Code Ann. § 11-609.

Is opt out limited to residents or domiciliaries of the state? Not specified. Idaho Code Ann. § 11-609: “In any federal bankruptcy proceeding, an individual debtor may exempt from property of the estate only such property as is specified under the laws of this state.”

Do state’s exemptions have extraterritorial application?

Collection Actions: INDIANA

Has state opted out of federal bankruptcy exemptions? Yes. Ind. Code § 34-55-10-1.

Is opt out limited to residents or domiciliaries of the state? Yes. Ind. Code § 34-55-10-1: “an individual debtor domiciled in Indiana is not entitled to use . . . [§ 522(d) exemptions].”

Do state’s exemptions have extraterritorial application?

Collection Actions: IOWA

Has state opted out of federal bankruptcy exemptions? Yes. Iowa Code § 627.10.

Is opt out limited to residents or domiciliaries of the state? Not specified, but probably not. Iowa Code § 627.10: “A debtor to whom the law of this state applies on the date of filing of a petition in bankruptcy is not entitled to elect . . . [§ 522(d) exemptions].” See In re Williams, 369 B.R. 470 (Bankr. W.D. Ark. 2007) (debtors residing in Arkansas are subject to Iowa opt-out statute).

Collection Actions: 11.3.9.2 Effect of Limitations Period on State Collection Remedies

A statute of limitations generally extinguishes the remedy, not the underlying right. While a debt may only be recoverable by lawsuit for a certain number of years, the debt itself may continue indefinitely, albeit unenforceable by lawsuit.130 This leaves unresolved in many states the question of whether the expiration of the limitations period extinguishes state remedies to enforce the debt, such as driver’s license suspensions, administrative garnishments, or tax intercepts.

Collection Actions: 11.3.9.3 Laches

The equitable defense of laches is established by proving both an unreasonable delay in asserting a right and prejudice against the party raising the defense. The general rule is that laches is not available in circumstances to which a clear statute of limitations applies.134

Collection Actions: 11.1.4 Joining the Court Debt Listserv

Litigators working on criminal justice debt issues may find it helpful to consult with other attorneys practicing in this space. The National Legal Aid & Defender Association maintains a court debt listserv for attorneys to discuss criminal justice debt issues and share legal developments. Interested attorneys must be vetted prior to joining the listserv.18

Collection Actions: 11.2.1 Introduction

The imposition and collection of criminal justice debt often raise complex questions of local, state, and federal law. Behind many of these questions are a set of underlying constitutional principles. In the 1970s, the U.S. Supreme Court began to address the limits on the government’s extraordinary power to collect debts through mechanisms unavailable to private creditors. These principles are discussed below.