Vermont Debt Collection Laws: Time Limits, Garnishment and Your Rights
Vermont debt rules: statute of limitations, wage garnishment limits, protected bank and home exemptions, judgments, collector rules and how to answer a debt lawsuit.
Quick answers for Vermont
- Time limit to sue on a written contract
- 6 years. Vermont's general civil-action limitations period (six years after the claim accrues) applies to contract debts, written or oral. 12 V.S.A. 511
- Wage garnishment limit
- For a debt from a consumer credit transaction, the debtor keeps the greater of 85% of weekly disposable earnings or 40 times the federal minimum hourly wage (for other debts, 75% or 30 times). 12 V.S.A. 3169, 3170
- Money protected in a bank account
- $700 in bank deposits or deposit accounts, plus a wildcard of $400 in any property and up to $7,000 of unused vehicle, tools, jewelry, household goods and crop exemptions. 12 V.S.A. 2740(15), (7)
- Answering a debt lawsuit
- In small claims court (where most consumer debt cases up to $5,000 are heard), you have 30 days to answer, counted from the mailing date if served by mail or from the date of sheriff service. Vermont Judiciary, Suing and Being Sued in Small Claims
Last verified: 2026-10-26
Time limits
| Time limit to sue on a written contract | 6 years. Vermont's general civil-action limitations period (six years after the claim accrues) applies to contract debts, written or oral. Source: 12 V.S.A. 511 |
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| Time limit for credit cards and open accounts | 6 years, the same general period. Source: 12 V.S.A. 511 |
| Can a payment restart the clock? | An acknowledgment or promise to pay affects the limitations defense only if it is in writing and signed by the debtor. The limitations chapter does not take away the effect of a payment of principal or interest. Payment provision: https://legislature.vermont.gov/statutes/section/12/023/00592 Source: 12 V.S.A. 591, 592 |
| How long a judgment lasts | 8 years. To renew or revive a civil judgment, the creditor must file a new action on the judgment in the Civil Division of the Superior Court within eight years after the judgment. A judgment lien on real estate also lasts eight years (and a renewed judgment can create a new eight-year lien). Lien: https://legislature.vermont.gov/statutes/section/12/113/02903 |
If you are sued
| Answering a debt lawsuit | In small claims court (where most consumer debt cases up to $5,000 are heard), you have 30 days to answer, counted from the mailing date if served by mail or from the date of sheriff service. If no answer is filed, the plaintiff may ask for a default judgment. |
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Garnishment and what creditors can't take
| Wage garnishment limit | For a debt from a consumer credit transaction, the debtor keeps the greater of 85% of weekly disposable earnings or 40 times the federal minimum hourly wage (for other debts, 75% or 30 times). The court may protect more if the debtor's reasonable weekly expenses for self and dependents are higher. No wage garnishment may be ordered against a debtor who received assistance from the Department for Children and Families or the Department of Vermont Health Access in the two months before the hearing. A court hearing is required before wages are garnished. Source: 12 V.S.A. 3169, 3170 |
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| Money protected in a bank account | $700 in bank deposits or deposit accounts, plus a wildcard of $400 in any property and up to $7,000 of unused vehicle, tools, jewelry, household goods and crop exemptions. Source: 12 V.S.A. 2740(15), (7) |
| Homestead exemption | $125,000 in value for a homestead (dwelling house, outbuildings and the land used with them) owned and used by the debtor as a homestead. Source: 27 V.S.A. 101 |
| Vehicle exemption | Up to $2,500 total in one or more motor vehicles (the wildcard can add more). Source: 12 V.S.A. 2740(1), (7) |
| Claiming an exemption | Wages can only be garnished after a court hearing, where the debtor can show the earnings exemptions and expenses. For other collection, the court sends the debtor a List of Exemptions (form 100-00511) with the notice of a financial disclosure hearing; the debtor should raise exemptions with the court at or before that hearing. |
Debt collectors and interest
| Medical debt protections | Since July 1, 2025, credit reporting agencies may not report or keep medical debt in a consumer's file. Large health care facilities and medical debt collectors may not report medical debt to credit bureaus, and large facilities may sell medical debt only to a nonprofit that will cancel it. In small claims court, consumer credit and medical debt claims are capped at $5,000. 18 V.S.A. 9485: https://legislature.vermont.gov/statutes/section/18/221/09485. Small claims cap: https://www.vtcourts.gov/self-help/debt-collection-small-claims |
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| Interest rate limits | Interest on a judgment lien accrues at 12% per year. Source: 12 V.S.A. 2903(c) |
Where to get help in Vermont
Debt & Collections FAQ
What is the statute of limitations on debt in Vermont?
6 years. Vermont's general civil-action limitations period (six years after the claim accrues) applies to contract debts, written or oral.
How long can a creditor sue on a credit card debt in Vermont?
6 years, the same general period.
Does making a payment restart the statute of limitations in Vermont?
An acknowledgment or promise to pay affects the limitations defense only if it is in writing and signed by the debtor. The limitations chapter does not take away the effect of a payment of principal or interest.
How long does a court judgment last in Vermont?
8 years. To renew or revive a civil judgment, the creditor must file a new action on the judgment in the Civil Division of the Superior Court within eight years after the judgment. A judgment lien on real estate also lasts eight years (and a renewed judgment can create a new eight-year lien).
How much of my wages can be garnished in Vermont?
For a debt from a consumer credit transaction, the debtor keeps the greater of 85% of weekly disposable earnings or 40 times the federal minimum hourly wage (for other debts, 75% or 30 times). The court may protect more if the debtor's reasonable weekly expenses for self and dependents are higher. No wage garnishment may be ordered against a debtor who received assistance from the Department for Children and Families or the Department of Vermont Health Access in the two months before the hearing. A court hearing is required before wages are garnished.
How much money in a bank account is protected from creditors in Vermont?
$700 in bank deposits or deposit accounts, plus a wildcard of $400 in any property and up to $7,000 of unused vehicle, tools, jewelry, household goods and crop exemptions.
What is the homestead exemption in Vermont?
$125,000 in value for a homestead (dwelling house, outbuildings and the land used with them) owned and used by the debtor as a homestead.
Can a creditor take my car in Vermont?
Up to $2,500 total in one or more motor vehicles (the wildcard can add more).
What protections apply to medical debt in Vermont?
Since July 1, 2025, credit reporting agencies may not report or keep medical debt in a consumer's file. Large health care facilities and medical debt collectors may not report medical debt to credit bureaus, and large facilities may sell medical debt only to a nonprofit that will cancel it. In small claims court, consumer credit and medical debt claims are capped at $5,000.
What is the maximum legal interest rate in Vermont?
Interest on a judgment lien accrues at 12% per year.
How do I respond to a debt collection lawsuit in Vermont?
In small claims court (where most consumer debt cases up to $5,000 are heard), you have 30 days to answer, counted from the mailing date if served by mail or from the date of sheriff service. If no answer is filed, the plaintiff may ask for a default judgment.
How do I stop a garnishment or claim an exemption in Vermont?
Wages can only be garnished after a court hearing, where the debtor can show the earnings exemptions and expenses. For other collection, the court sends the debtor a List of Exemptions (form 100-00511) with the notice of a financial disclosure hearing; the debtor should raise exemptions with the court at or before that hearing.
Debt & Collections in other states
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General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.