Legal Definitions - nonleviable

Nonleviable describes property or assets that are legally protected from being seized, sold, or taken by creditors or the government to satisfy a debt, judgment, or forfeiture.

When an asset is nonleviable, it means that even if an individual or entity owes money and a court has ordered payment (a judgment), certain specific items or funds cannot be touched by those seeking to collect the debt. These protections are put in place by law to ensure people can maintain a basic standard of living, continue to work, or preserve essential future security.

Here are a few examples to illustrate this concept:

• Example 1: Essential Tools for a Profession

  Imagine a freelance graphic designer who owns a high-performance computer and specialized software, which are absolutely critical for their work. If this designer were to fall into significant debt and a creditor obtained a court judgment against them, many states have laws that protect a certain value of "tools of the trade" from being seized. This means the creditor generally cannot take the designer's computer and software, even if they are valuable assets, because doing so would prevent the designer from earning a living. The computer and software, up to the legally defined limit, would be considered nonleviable.

• Example 2: Retirement Savings Accounts

  Consider an individual who has diligently saved for retirement in a 401(k) plan through their employer. If this person faces an unexpected lawsuit and a large financial judgment is awarded against them, their 401(k) funds are typically protected by federal law (ERISA) and often by state laws from being seized by most creditors. This protection ensures that individuals can preserve their long-term financial security for retirement, even in the face of significant personal debt. The funds within the 401(k) are largely nonleviable.

• Example 3: Government Disability Benefits

  Suppose a person receives monthly Social Security Disability Insurance (SSDI) payments due to a severe medical condition. If this individual has outstanding medical bills or other consumer debts, creditors generally cannot garnish or seize these disability payments directly from their bank account, especially if the funds can be clearly identified as government benefits. Laws are in place to ensure that these essential benefits, intended for basic living expenses, remain available to the recipient. These government benefits are considered nonleviable.