Military, Veterans and Other Overlooked Exemptions

On behalf of Macdonald Fernandez LLP on Monday, October 6, 2014.

Did you know that a military soldier's deposits to savings accounts while on permanent duty abroad are fully exempt? 10 U.S.C. §1035(d) provides that:

An amount deposited under this section, with interest thereon, is exempt from liability for the member's debts, including any indebtedness to the United States or any instrumentality thereof, and is not subject to forfeiture by sentence of a court-martial.

Did you know that a creditor can only recover $1.00 from a seaman on a voyage? 46 U.S.C. § 11111 provides that:

When a seaman is on a voyage on which a written agreement is required under this part, not more than $1 is recoverable from the seaman by a person for a debt incurred by the seaman during the voyage for which the seaman is signed on until the voyage is ended.

There are many miscellaneous non-bankruptcy federal exemptions that are often overlooked but can be of critical importance to military personnel, sailors, veterans, civil servants, railroad workers, Native American tribes and others. The following chart of such miscellaneous exemptions is provided for your education and convenience.

Miscellaneous Non-Bankruptcy Federal Exemptions
AssetExemptionAmount
Civil service employees' retirement benefits5 U.S.C. § 8346Unlimited
Foreign service employees' retirement benefits22 U.S.C. § 4060(c)Unlimited
Military service employees' retirement benefits10 U.S.C. § 1440Unlimited
Railroad workers' retirement benefits45 U.S.C. § 231mUnlimited
Social Security benefits42 U.S.C. § 407Unlimited
Veteran's benefits38 U.S.C. § 5301Unlimited
Central Intelligence Agency (CIA) employees' retirement benefits50 U.S.C. § 2094Unlimited
Military Medal of Honor Roll pensions38 U.S.C. § 1562(c)Unlimited
Military service survivor's benefit10 U.S.C. § 1450(i)Unlimited
Survivor's benefits for federal judges and certain other judicial employees28 U.S.C. § 376(n)Unlimited
Lighthouse workers survivor's benefits33 U.S.C. § 775Unlimited
Government employees' death and disability benefits5 U.S.C. § 8130Unlimited
Longshoremen, harbor workers' death and disability benefits33 U.S.C. § 916Unlimited
War, risk, hazard, death, or injury compensation42 U.S.C. § 1717Unlimited
Military deposits to savings accounts while on permanent duty abroad10 U.S.C. § 1035(d)Unlimited
Wages (with exceptions for domestic support, bankruptcy and taxes)15 U.S.C. § 1673Greater of 75% of earned but unpaid wages; or 30 times the federal minimum wage
Indian [sic] land sale or lease proceeds (Secretary of the Interior can consent to exceptions)25 U.S.C. § 410Unlimited
Klamath tribe judgment funds (with exceptions for debts owed to U.S.)25 U.S.C. §§ 543 & 545Unlimited
Military group life insurance (with certain exceptions for taxes)38 U.S.C. § 1970(g)Unlimited
Railroad workers' unemployment benefits45 U.S.C. § 352(e)Unlimited
Seamen's clothing (fine for person detaining a seaman's clothing)46 U.S.C. § 11110Unlimited
Debts of a seaman incurred while on a voyage (amount recoverable is limited to $1.00)46 U.S.C. § 11111Unlimited
Seamen & fishermen wages (with exceptions for spousal or child support)46 U.S.C. § 11109Unlimited
Serviceman's Group Life Insurance or Veteran's Group Life Insurance38 U.S.C. § 1970(g)Unlimited