Legal Definitions - waiver of exemption

A waiver of exemption is when a person who owes money to someone else gives up their right to protect certain possessions from being taken away by the creditor. This happens when a court orders the sale of the debtor's personal property to pay off the debt.

Let's say John owes $10,000 to his creditor. The creditor takes John to court and the court orders the sale of John's car to pay off the debt. However, John has the right to protect his car from being sold because it is exempt from being taken away. If John decides to give up his right to protect his car, he signs a waiver of exemption. This means that the creditor can sell John's car to pay off the debt.

Another example is if a person owes money and has a bank account with $1,000 in it. In some states, a certain amount of money in a bank account is exempt from being taken away by a creditor. If the debtor signs a waiver of exemption, the creditor can take the $1,000 from the bank account to pay off the debt.

These examples illustrate how a waiver of exemption works. It is a way for a debtor to give up their right to protect certain possessions from being taken away by a creditor in order to pay off a debt.