HB1236
To Amend The Law Concerning Garnishment Against The State Or A Subdivision Of The State; And To Allow For Income Tax Refunds To Be Subject To Garnishment By Judgment Creditors.
Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment
Sponsors
AI-Generated Summary
House Bill 1236 amends Arkansas law concerning the garnishment of assets held by the state or its subdivisions. Under existing law, refunds for overpayment of Arkansas state income tax held by the state were specifically exempted from garnishment by judgment creditors. This bill removes that exemption, thereby permitting judgment creditors to garnish state income tax refunds belonging to a defendant in a civil action. The legislation clarifies that these changes do not alter existing statutes regarding the set-off of debts owed to state programs. The bill effectively expands the pool of assets accessible to creditors to satisfy legal judgments.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are judgment creditors—individuals or entities who have been awarded a judgment in a civil court and are seeking to recover owed funds from a debtor. By allowing access to state income tax refunds, these creditors gain an additional mechanism to collect on outstanding debts that were previously protected from such legal action.
Who Might Suffer?
The primary group negatively impacted is debtors who owe money to judgment creditors and are eligible for an Arkansas state income tax refund. These individuals will now be subject to having their tax refunds intercepted to satisfy civil judgments, potentially reducing their available financial resources and affecting their ability to utilize anticipated tax returns for personal expenses or financial stability.
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