Debt Collection Laws in Vermont

If you're dealing with debt collection in Vermont, here's what actually protects you: a cap on how much of your paycheck can be garnished, a base amount of home equity and bank funds creditors can't touch, and a deadline after which a debt lawsuit generally can't succeed. Current as ofJuly 2026 — sourcing for each section is linked below.

How much of my paycheck can be garnished in Vermont?

Vermont exempts 85% of your disposable weekly earnings from garnishment on ordinary consumer debt — one of the strongest wage-garnishment protections in the country.

Under 12 V.S.A. § 3170(b), the baseline rule protects 75% of a judgment debtor's weekly disposable earnings (or 30 times the federal minimum hourly wage, whichever is greater) from trustee process. But if the underlying debt arose from a 'consumer credit transaction' — credit cards, personal loans, medical bills financed on credit, and similar — the exempt share jumps to 85% of disposable earnings (or 40 times the federal minimum wage, whichever is greater). In practice, that caps what a collector can reach at roughly 15% of take-home pay, well below the 25% ceiling under the federal Consumer Credit Protection Act.

Vermont also flatly bars a garnishment order against anyone who received assistance from the Department for Children and Families or the Department of Vermont Health Access within the two months before the garnishment hearing, provided they establish that at the hearing. And any attempt to get a debtor to waive these protections in a contract is void by statute — a creditor can't just write around them.

• 12 V.S.A. § 3170 – Exemptions; issuance of order

Can a creditor take money from my bank account in Vermont?

Vermont protects $700 held in bank deposits or deposit accounts outright, and you can often shield more by tapping an unused wildcard exemption.

12 V.S.A. § 2740(15) exempts a debtor's interest in bank deposits or deposit accounts up to $700 from attachment and execution. Separately, subdivision (7) of the same statute gives every debtor a $400 wildcard exemption for any property, plus up to $7,000 of whatever's left unused from the motor-vehicle, tools-of-trade, jewelry, household-goods, and crops exemptions listed elsewhere in § 2740. If you haven't used those other categories — say you don't own a car worth much — that leftover amount can be applied to protect additional cash sitting in a bank account beyond the flat $700.

This is separate from federal protection for direct-deposited Social Security, VA, and other federal benefit payments, which banks must automatically shield for two months' worth of the benefit amount under 31 C.F.R. Part 212, regardless of any state exemption.

• 12 V.S.A. § 2740 – Goods and chattels; exemptions from

Is my home protected from creditors in Vermont?

Vermont shields up to $125,000 of equity in your home from most judgment creditors.

27 V.S.A. § 101 exempts a homestead — the dwelling house, outbuildings, and the land used with it — from attachment and execution up to $125,000 in value, along with the rents, issues, profits, and products of that property. That $125,000 figure took effect July 1, 2023 under 2023, No. 6, § 314, so double-check that any older source you're comparing against isn't quoting a pre-2023 amount.

The homestead exemption protects equity from unsecured judgment creditors — it doesn't erase a mortgage, tax lien, mechanic's lien, or other lien the homeowner voluntarily granted against the property. Married couples and civil-union partners don't get to double up: a jointly owned homestead is limited to one combined $125,000 exemption, not $125,000 per spouse.

• 27 V.S.A. § 101 – Definition; exemption from attachment and execution

How long can a debt collector sue me in Vermont?

Vermont gives creditors six years to sue on virtually any unpaid consumer debt, whether it's a signed contract, a credit card balance, or a handshake loan.

Unlike many states, Vermont doesn't set a shorter clock for informal or open-account debt — 12 V.S.A. § 511's general six-year limit on civil actions covers essentially all contract-based debt claims, so the deadline is the same regardless of whether the debt is documented in writing.

The six years runs from when the cause of action accrues (typically the date of default or last payment), and making a partial payment or otherwise acknowledging the debt in writing can restart the clock — so an old, time-barred debt can become collectible again if you're not careful about how you respond to a collector.

• 12 V.S.A. § 511 – Civil action

Does Vermont have its own debt collection law beyond the federal FDCPA?

Vermont doesn't have a law called a 'mini-FDCPA,' but its Consumer Protection Act and the Attorney General's debt-collection rule ban unfair and deceptive collection tactics — and, unlike the federal FDCPA, they reach original creditors collecting their own debts, not just third-party collection agencies.

9 V.S.A. § 2453(a) declares unfair or deceptive acts and practices in commerce unlawful, and the Attorney General has used the rulemaking authority in § 2453(c) to adopt Consumer Protection Rule CF 104 (Debt Collection), which spells out what counts as an unfair or unconscionable collection practice. That includes threatening violence or falsely accusing a debtor of a crime, calling with a frequency or at hours that amount to harassment, continuing to call a debtor's workplace after being told to stop, collecting under a false or fictitious business name, failing to disclose that a communication is an attempt to collect a debt, disclosing the debt to third parties, and a collector engaging in the unauthorized practice of law.

Consumers harmed by a violation can sue directly under 9 V.S.A. § 2461(b): recoverable relief includes actual damages, exemplary damages up to three times the consideration involved, and reasonable attorney's fees, with a statutory right to a jury trial. Vermont doesn't otherwise require third-party debt collectors or collection agencies to hold a state license (debt settlement/debt adjustment companies are licensed separately, under 8 V.S.A. chapter 83, with their own private right of action under § 2764). Effective July 1, 2026, Vermont also added narrower 'coerced debt' protections under 9 V.S.A. chapter 63, subchapter 13, letting survivors of domestic abuse, trafficking, or financial exploitation dispute debt incurred through an abuser's coercion or fraud and force creditors to stop collection and correct credit reporting once the debt is substantiated as coerced.

• 9 V.S.A. § 2453 – Practices prohibited; consumer protection
• 9 V.S.A. § 2461 – Civil penalty (private right of action)

Where can I find free or low-cost legal help in Vermont?

If you're dealing with a debt lawsuit, garnishment, or collector dispute in Vermont, a good starting point is the state bar's lawyer referral service or one of the legal aid organizations below — both can point you to self-help court resources even if you don't qualify for free representation.

• Vermont Legal Aid
• Vermont Bar Association Lawyer Referral Service