In Vermont, a judgment creditor cannot force the sale of the equity you hold in your home up to $125,000 under the state homestead exemption (27 V.S.A. § 101), and most of your everyday property and income is protected by a separate list of personal-property exemptions in 12 V.S.A. § 2740. Vermont is also notably protective of paychecks: for ordinary consumer debts, state law shields a larger share of your wages than the federal garnishment cap does. These protections are not automatic in every situation, though—you generally have to claim them in writing once a creditor moves to seize property or levy your bank account.
Vermont's homestead exemption
Vermont's homestead exemption protects up to $125,000 of equity in your principal dwelling and the land it sits on. This applies to a house, condominium, or similar residence that you occupy as your home. If your equity (the home's value minus what you owe on the mortgage) is at or below the exemption amount, a general judgment creditor cannot force a sale to collect.
Important limits apply. The homestead exemption does not stop foreclosure by your mortgage lender, and it does not erase property-tax liens, a properly recorded mechanic's lien, or debts the homestead was specifically pledged to secure. The exemption protects equity from general creditors—the ones who sued you over a credit card, medical bill, or similar debt—not from a creditor you voluntarily gave a security interest in the home.
Wages: how much a creditor can garnish
The federal baseline, set by the Consumer Credit Protection Act, lets a creditor garnish the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage. Vermont gives consumers more protection than that floor.
Under Vermont's trustee-process statute (12 V.S.A. § 3170), wages tied to a consumer credit transaction—think credit cards, store financing, most personal debts—are protected so that only a small percentage of weekly disposable earnings can be taken, and earnings below a multiple of the federal minimum wage are fully exempt. The protection for consumer debts is stronger than the standard 25% federal cap. Because the exact percentage and the minimum-wage multiplier are set by statute and turn on whether the debt is a consumer debt, confirm the current numbers before relying on them. Vermont's minimum wage is adjusted annually—it was $14.01 per hour as of January 1, 2025, and rises with inflation—so check the current figure with the Vermont Department of Labor rather than assuming last year's rate.
Court-ordered child support and certain other obligations follow different, higher garnishment limits. If you receive a garnishment notice, read it closely: it should explain your right to a hearing where you can claim that some or all of the wages are exempt.
Your vehicle, household goods, and tools
Vermont's personal-property exemptions in 12 V.S.A. § 2740 cover the things you need for daily life. Key categories include:
- Motor vehicle: equity in one or more motor vehicles is exempt up to a set dollar limit (commonly cited at $2,500 in equity). Equity means the vehicle's value minus any loan balance.
- Household goods and furnishings: furniture, appliances, goods, books, clothing, and similar items are exempt up to an aggregate dollar cap.
- Tools of the trade: professional or trade books and tools you use to earn a living are exempt up to a statutory amount.
- Specific protected items: a cooking stove, heating appliances, refrigerator, freezer, water heater, and sewing machines; a wedding ring and other jewelry up to a limit; health aids; growing crops; and a list of livestock and feed.
- Wild-card exemption: Vermont allows a modest amount of any property of your choosing, plus the ability to apply a defined amount of unused exemption value from certain categories to other property. This flexibility lets you protect an asset that does not fit neatly into another category.
Because several of these caps are specific dollar figures that the Legislature can adjust, verify the current amount in 12 V.S.A. § 2740 before counting on a precise number.
Retirement accounts
Money held in qualified retirement plans is broadly protected in Vermont. ERISA-governed employer plans (such as a 401(k) or pension) generally cannot be reached by ordinary creditors, and Vermont exempts a debtor's interest in self-directed retirement accounts such as IRAs under 12 V.S.A. § 2740. Some self-directed accounts are protected to the extent reasonably necessary for the support of you and your dependents, and recent contributions can sometimes be treated differently, so the protection is strong but not unlimited. Keeping retirement funds in a clearly identified retirement account—rather than moving them into an ordinary checking account—helps preserve the exemption.