Senate Judiciary Committee hears SB 142 to raise bank-account and wage garnishment exemptions

Senate members on the Judiciary Committee on an unsigned date heard testimony on Senate Bill 142, a proposal from Sen. Fabian D'Onate (D., Senate District 10) that would raise Nevada's automatic exemptions from wage garnishment and bank-account levies and require the Department of Business and Industry to adjust exemption amounts every three years.

The bill would increase the amount of wages and bank funds that are self-executingly exempt from collection and revise the definition of “earnings” for certain exemptions. Sponsor Fabian D'Onate told the committee SB 142 "requires the Department of Business and Industry to adjust monetary amounts set forth in provisions governing property exempt from execution, every 3 years." Supporters said the measure is intended to prevent garnishment-driven evictions, loss of transportation and other crises for low-income families.

Michael Best, senior attorney at the National Consumer Law Center, framed the bill as a response to rising household financial strain. He said families "are really on a financial precipice," citing rising inflation, housing costs and high levels of revolving debt. Best told the committee Nevada currently has an automatic bank-account protection of $400 and an automatic weekly wage protection of about $393.60; SB 142 would raise the automatic bank-account exemption to $5,000 and establish a higher automatic wage exemption level and related percentage protections.

Legal services testimony gave concrete examples of how current law affects clients. Peter Aldous, a staff attorney with the Legal Aid Center of Southern Nevada, recounted a client who "was 59 years old and had been diagnosed with stage 4 cancer" and whose original roughly $11,000 deficiency judgment had grown to more than $38,000 with interest and renewals; garnishment of overtime reduced her take-home pay by more than $700 a month, Aldous said, adding that the client was evicted and later died before the judgment was set aside.

Opponents said the draft bill as written raises exemption levels substantially and could reduce creditors' ability to collect judgments. Daniel Stewart, testifying for Clark County Collection Services and the Nevada Collectors Association, said the bill "raises both the, dollar amount and the percentages that are exempt from certain collections, making a pretty big, jump from current law even accounting for inflation." Industry witnesses including the Nevada Credit Union League and the Creditors' Rights Attorneys of Nevada said they are working with the sponsor to reach compromise numbers.

A national trade association caller, Jay Singh of the Receivables Management Association International, argued SB 142 would make it harder for victims to collect judgments against bad actors, saying "SB 142 makes it harder for victims to recover their judgments against bad actors." Other opponents raised concerns that larger exemptions could affect small-business lending and overall credit availability.

Committee members asked a range of technical and policy questions: whether the bill would reduce lending to people with low incomes, how different types of debt (medical, consumer, payday) should be treated, and whether some narrowly targeted protections (for example, for catastrophic medical debt) would be preferable. Supporters and experts said some debt categories are hard to disaggregate in practice and that a broad baseline protection is simpler to administer.

Sponsor and stakeholders told the committee they are negotiating technical amendments. No vote occurred; the hearing concluded with the sponsor saying stakeholders are working toward agreed language before a work session.

The committee recorded in-person and phone testimony from consumer advocates, legal services, collectors, credit unions, debt-industry trade groups and at least one Nevada small-business owner. With negotiations ongoing, the bill's final exemption amounts and statutory mechanics remain subject to change.