North Dakota Bankruptcy Laws : North Dakota State Exemptions

Complete state of North Dakota bankruptcy exemptions laws which protect a debtor’s property when personal bankruptcy is filed.

47-18-01. Homestead exemption – Area and value.
The homestead of any individual, whether married or unmarried, residing in this state consists of the land upon which the claimant resides, and the dwelling house on that land in which the homestead claimant resides, with all its appurtenances, and all other improvements on the land, the total not to exceed one hundred thousand dollars in value, over and above liens or encumbrances or both. The homestead shall be exempt from judgment lien and from execution or forced sale, except as otherwise provided in this chapter. The homestead may not embrace different lots or tracts of land unless the lots or tracts of land are contiguous. For purposes of this section, “contiguous” means two or more tracts of real property which share a common point or which would share a common point but for an intervening road or right of way.

28-22-02. Absolute exemption.
The property mentioned in this section is absolutely exempt from all process, levy, or sale:

1. All family pictures.
2. A pew or other sitting in any house of worship.
3. A lot or lots in any burial ground.
4. One family Bible or other family primary religious text and all schoolbooks used by the family and all other books used as a part of the family library.
5. All wearing apparel, not exceeding five thousand dollars in value, and all clothing of the debtor and the debtor’s family.
6. The in-kind provisions for the debtor and the debtor’s family necessary for one year’s supply, either provided or growing, or both, and in-kind fuel necessary for heating the debtor’s home or operating the debtor’s motor vehicle for one year.
7. The homestead as created, defined, and limited by law.
8. All crops and grain, both threshed and unthreshed, raised by the debtor on not to exceed one hundred sixty acres [64.75 hectares] of land in one tract occupied by the debtor, either as owner or tenant, as the debtor’s home, but the provisions of this subsection in no way affect seed, thresher, or landlord liens, and if the debtor takes advantage of this subsection the debtor may not take any additional alternative exemptions provided under this chapter.
9. All insurance benefits resulting from insurance covering any or all of the absolute exemptions if the insurance benefits are in cash or have been invested in other property capable of exemption under this chapter.
10. In lieu of the homestead, and subject to the same value limitations that exist with respect to the homestead exemption, any housetrailer or mobile home occupied as a residence by the debtor or the debtor’s family, except that it is not exempt from process, levy, or sale for taxes levied on it pursuant to chapter 57-55. This section does not preclude the debtor from claiming a mobile home as a dwelling house as part of the homestead.

28-22-03.1. Additional exemptions for residents.
In addition to the exemptions from all attachment or process, levy and sale upon execution, and any other final process issued from any court, otherwise provided by law, a resident of the state may select:

1. In lieu of the homestead exemption, up to seven thousand five hundred dollars. This exemption is not available if the resident exemption claimant, the spouse of the resident exemption claimant, or other head of the family of the resident exemption claimant has chosen the homestead exemption provided for under subsection 7 of section 28-22-02.
2. A motor vehicle exemption in one vehicle not to exceed two thousand nine hundred fifty dollars in value over security interests and liens upon that vehicle, or a motor vehicle exemption in one vehicle not to exceed thirty-two thousand dollars for a motor vehicle that has been modified at a cost of not less than one thousand five hundred dollars to accommodate an individual with a permanent physical disability who is the owner of that motor vehicle.
3. The debtor’s aggregate interest, not to exceed one thousand five hundred dollars in value, in any tools, implements, or professional books of the trade of the debtor or the trade of a dependent of the debtor.
4. Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.
5. The debtor’s aggregate interest, not to exceed in value eight thousand dollars less any amount of property transferred in the manner specified in 11 U.S.C. 542(d), in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.
6. Professionally prescribed health aids for the debtor or a dependent of the debtor.
7. Retirement funds that have been in effect for at least one year, to the extent those funds are in a fund or account that is exempt from taxation under section 401, 403, 08, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986. The value of those assets exempted may not exceed one hundred thousand dollars for any one account or two hundred thousand dollars in aggregate for all accounts. The dollar limit does not apply to the extent this property is reasonably necessary for the support of the resident and that resident’s dependents. Retirement funds are not exempt from enforcement of any order to pay spousal support or child support, or a qualified domestic relations order under sections 15-39.1-12.2, 39-03.1-14.2, and 54-52-17.6. As used in this subsection, “reasonably necessary for the support” means required to meet present and future needs, as determined by the court after consideration of the resident’s responsibilities and all the present and anticipated property and income of the resident, including that which is exempt.
8. The debtor’s right to receive:

a. A social security benefit, except that the benefit is not exempt for enforcement of any order for the support of a dependent child.
b. Veteran’s disability pension benefits, not including military retirement pay, except that the benefits are not exempt from process levy or sale for enforcement of any order for the support of a dependent child.
c. A disability, illness, or unemployment benefit.
d. Alimony, support, or separate maintenance, but not property settlements, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
e. A payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless:

(1) That plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under that plan or contract arose;
(2) That payment is on account of age or length of service; and
(3) That plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.

9. The debtor’s right to receive, or property that is traceable to:

a. An award under a crime victim’s reparation law.
b. A payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
c. A payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of that individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
d. A payment, not to exceed eighteen thousand four hundred fifty dollars, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent.
e. A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

32-09.1-03. Restriction on garnishment of earnings.

1. The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment may not exceed the lesser of:

a. Twenty-five percent of disposable earnings for that week.
b. The amount by which disposable earnings for that week exceed forty times the federal minimum hourly wage prescribed by section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended [Pub. L. 95-151; 91 Stat. 1245; 29 U.S.C. 206] or any equivalent multiple thereof prescribed by regulation by the secretary of labor in case of earnings for any pay period other than a week, in effect at the time the earnings are payable.

2. The maximum amount subject to garnishment under subsection 1 for any workweek must be reduced by twenty dollars for each dependent family member residing with the garnishment debtor. Within ten days after receipt of the garnishment summons, the garnishment debtor shall provide to the employer a list, signed under penalty of perjury by the garnishment debtor, of the names and social security numbers, if any, of the dependents who reside with the garnishment debtor. If the garnishment debtor fails to provide the list, it is presumed that the garnishment debtor claims no dependents, but the garnishment debtor may provide the list at a later date, in which case the exemptions claimed will be in effect for amounts subject to garnishment after the date the list is provided.
3. The restrictions of subsection 1 do not apply in the case of:

a. Any order of any court for the support of any person.
b. Any order of any court of bankruptcy under chapter XIII of the Bankruptcy Act.
c. Any debt due for any state or federal tax.

4. The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person may not exceed:

a. If such individual is supporting a spouse or dependent child other than a spouse or child with respect to whose support such order is used, fifty percent of the individual’s disposable earnings for that week; and
b. If such individual is not supporting a spouse or dependent child other than a spouse or child with respect to whose support such order is used, sixty percent of the individual’s disposable earnings for that week; except that, with respect to the disposable earnings of any individual for any workweek, the fifty percent specified in subdivision a must be deemed to be fifty-five percent and the sixty percent specified in subdivision b must be deemed to be sixty-five percent, if and to the extent that the earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek.

5. No court of this state may make, execute, or enforce any order or process in violation of this section.

14-09-09.31. Child support exempt from process.
A child support obligation owed to an obligee who is a judgment debtor may not be subject to execution, garnishment, attachment, or other process except to satisfy that child support obligation. This section does not prohibit the child support agency from authorizing the state disbursement unit to apply a payment of past-due support owed to an obligee to a child support obligation owed by the same obligee or to another debt being enforced by the North Dakota department of human services that arises out of a public assistance program.
26.1-15.1-18. Benefits not attachable.
All money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society is exempt from liability for debts of the person to or on account of whom the items are paid, provided, or rendered, and are not subject to seizure upon execution or other process.
26.1-33-40. Avails of life policy payable to deceased or to the deceased’s heirs, personal representatives, or estate – Exemption – Distribution.
The avails of a life insurance policy or of a contract payable by any mutual aid or benevolent society, when made payable to the deceased, to the personal representatives of the deceased, to the deceased’s heirs, or to the deceased’s estate, is not subject to the debts of the decedent upon the death of the insured or member of the society except by special contract. The avails must be inventoried as a part of the estate of the decedent and must be considered as part of the general assets of the estate. The insured may transfer the avails of the life insurance policy or contract either by will or by contract. Nothing contained in this section affects, in any manner, any life insurance policy or beneficiary certificate which is made payable to a designated person, including the spouse of the insured, or to persons or to members of a family designated as a class, such as “all children” or “all brothers and sisters”, even though the members of the class are not designated by name; or permits any insured to dispose of the avails of a contract by a mutual or fraternal society by will to anyone who could not be a beneficiary in the contract under the charter or bylaws of the society.
28-22-05. Exemptions of an unmarried person without dependents.
In addition to the absolute exemptions mentioned in section 28-22-02, except in subsection 8 thereof, an unmarried person without any dependents, in person or by that person’s agent, may select from that person’s other personal property, goods, chattels, merchandise, money, or other personal property not exceeding in value the sum of three thousand seven hundred fifty dollars, which is exempt.

28-22-19. Exemptions from legal process – Public pensions, assistance, and awards.
The following amounts are exempt from liability for debts of the person to or on account of whom the amounts are paid, and are not subject to seizure upon execution or other process:

1. All pensions or annuities or retirement, disability, death, or other benefits paid or payable by, or amounts received as a return of contributions and interest from, a retirement system established pursuant to state law by the state except as provided by sections 15-39.1-12.2, 39-03.1-14.2, 54-52-17.6, and 54-52.2-03.3, a state agency, a political subdivision of the state, or a firefighters relief association for retirement, annuity, pension, disability benefit, or death benefit purposes. The exemption in this subsection does not apply to the collection of child support unless federal law requires an exemption or if complying with an execution or other process would require an actuarial analysis to determine the current value of the amounts that are payable to the debtor.
2. All awards made pursuant to chapter 54-23.4 as compensation for victims of crimes.
3. All payments of assistance as aid to dependent children pursuant to chapter 50-09.

52-06-30. Assignment of benefits prohibited – Benefits exempt from remedies for collection of debt – Exception.

1. No assignment, pledge, or encumbrance of any right to benefits which are or may become due or payable under the North Dakota unemployment compensation law is valid. Such rights to benefits are exempt from levy, execution, attachment, or any other remedy provided for the collection of a debt. Benefits received by any individual, as long as they are not mingled with other funds of the recipient, are exempt from any remedy for the collection of all debts except debts incurred for necessaries furnished to the individual, that person’s spouse, or dependents during the time when the individual was unemployed. No waiver of any exemption provided for in this subsection is valid. However, this subsection does not impair the operation of subsection 2 or section 52-06-06.1 or the continuous levy authorized under Public Law No. 105-34, section 1024 [111 Stat. 923-924; 26 U.S.C. 6331(h)].
2. An individual filing a new claim for unemployment compensation benefits, at the time of filing the claim, must be advised that:

a. Unemployment compensation is subject to federal income tax and state income tax;
b. Requirements exist pertaining to estimated federal and state tax payments;
c. The individual may elect to have federal income tax deducted and withheld from the individual’s payment of unemployment compensation benefits at the amount specified in the federal Internal Revenue Code;
d. The individual, having elected to have federal income tax withheld, may also elect to have state income tax deducted and withheld from the individual’s payment of unemployment compensation at a rate determined by the tax commissioner pursuant to section 57-38-59; and
e. The individual is permitted to change a previously elected withholding status. Amounts deducted and withheld from unemployment compensation must remain in the unemployment fund until transferred to the federal and state taxing authority as payment of income tax. The bureau shall follow all procedures specified by the United States department of labor, the federal internal revenue service, and the tax commissioner pertaining to the deducting and withholding of income tax. Amounts must be deducted and withheld under this section only after amounts are deducted and withheld for any overpayments of unemployment compensation, child support obligations, or any other amounts required to be deducted and withheld under this chapter.
52-09-22. Benefits unassignable and exempt from legal remedies. (Old Age and Survivor Insurance)
The right of any person to any further payment under this chapter is not transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this chapter are subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
54-52.2-06. Deferred compensation program – Benefits – Taxation – Exemption from judicial process – Assignment. (Public Employees)
The deferred compensation program established by this chapter shall exist and serve in addition to retirement, pension, or benefit systems established by the state, county, city, town, or other political subdivision, and no deferral of income under the deferred compensation program shall effect a reduction of any retirement, pension, or other benefit provided by law. However, any sum deferred under the deferred compensation program is not subject to taxation until distribution is actually made to the employee. Any unpaid benefits under the deferred compensation program established by this chapter are not subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, except as provided by section 54-52.2-03.3. Neither the employee, the employee’s beneficiary, nor any designee of the employee or the employee’s beneficiary has the right to commute, sell, assign, transfer, or otherwise convey the right to receive payments under this chapter.

65-05-29. Assignment of claims void – Claims exempt. (Workers’ Compensation)

1. Any assignment of a claim for compensation under this title is void. All compensation and claims therefor are exempt from claims of creditors except any of the following:

a. A child support obligation ordered by a court of competent jurisdiction.
b. A claim by job service North Dakota for reimbursement of unemployment benefits, for the amount that was paid by job service North Dakota during the period for which the claimant is found eligible for temporary total or permanent total disability benefits, not to exceed the disability award actually made by the organization.
c. A claim by the organization for any payments made due to:

(1) Clerical error, mistake of identity, innocent misrepresentation by or on behalf of the recipient, or any other circumstance of a similar nature, all not induced by fraud, in which cases the recipient shall repay it or recoupment of any unpaid amount may be made from any future payments due to the recipient on any claim with the organization;
(2) An adjudication by the organization or by order of any court, if the final decision is that the payment was made under an erroneous adjudication, in which cases the recipient shall repay it or recoupment of any unpaid amount may be made from any future payments due to the recipient on any claim with the organization;
(3) Fraud, in which case the recipient shall repay the payment or the unpaid amount of the sum may be recouped from any future payments due to the recipient on any claim with the organization; or
(4) Overpayment due to application of section 65-05-09.1.

2.

a. Notwithstanding paragraph 2 of subdivision c of subsection 1, during the sixty days immediately following the date of injury, if the organization accrues a medical expense or makes a payment for a medical expense and the organization later determines the medical expense is for the care and treatment of a noncompensable injury, disease, or other condition, the injured employee is not liable for the medical expense accrued or paid by the organization before the earlier of:

(1) The third day following the date the organization makes a determination the medical expense is for a noncompensable injury, disease, or condition; or
(2) The third day following the date the injured employee or medical provider reasonably should have known the medical expense is for a noncompensable injury, disease, or condition.

b. Medical expenses incurred under this subsection may not be charged against an employer’s account for purposes of experience rating.

Note: While this reference information is current as of August 2010, it may not reflect the most up-to-date exemption figures on official state of North Dakota bankruptcy court statutes.

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