Westman Com'n Co. v. Schaerrer, 85CA1760

• Decision Date: 02 July 1987
• Docket Number: No. 85CA1760,85CA1760
• Citation: 748 P.2d 1316
• Parties: WESTMAN COMMISSION COMPANY, Plaintiff-Appellee, v. Irma L. SCHAERRER, Defendant-Appellant. . II
• Court: Colorado Court of Appeals

Page 1316

748 P.2d 1316

WESTMAN COMMISSION COMPANY, Plaintiff-Appellee, v. Irma L. SCHAERRER, Defendant-Appellant.

No. 85CA1760.

Colorado Court of Appeals Div. II.

July 2, 1987.

Rehearing Denied July 30, 1987.

Certiorari Granted (Schaerrer) Jan. 11, 1988.

Lirtzman & Nehls, P.C., Joan M. Norman, Boulder, for plaintiff-appellee.

Bernard A. Poskus, Denver, for defendant-appellant.

SMITH, Judge.

Defendant, Irma Schaerrer, appeals the order of the trial court denying her claim that the guaranteed student loan funds in her checking account were exempt from garnishment. We affirm.

During the latter portion of August 1985, the defendant received a $2500 loan guaranteed by the federal government under the Higher Education Act, 20 U.S.C. § 1071, et seq., so that she could attend college. The proceeds of that guaranteed student loan were deposited in her checking account. Thereafter, in September 1985, that account was garnished to satisfy a judgment debt owed to plaintiff, Westman Commission Company.

Defendant filed a claim of exemption in the trial court, asserting, inter alia, that because guaranteed student loan funds were required to be used solely for educational purposes, they could not be garnished for payment of debts unrelated to education.

At the conclusion of a hearing on defendant's claim, the trial court denied the exemption. The transcript of that hearing was not certified to this court on appeal. The parties have, however, stipulated to the fact that the trial court denied Schaerrer's claim of exemption ruling that the proceeds of the loan were not exempt from garnishment.

Assuming, arguendo, that the funds in defendant's checking account retained their identity as proceeds of a guaranteed student loan, a fact which, in the absence of a transcript we are unable to ascertain, we hold that such proceeds are not exempt from execution under either the laws of Colorado or the laws of the United States.

To our knowledge there is no federal or state statute, regulation, or rule that expressly exempts guaranteed student loan funds from garnishment or execution. Rather, defendant's argument proceeds from the premise that because she has received monies which she is required to use for specific purposes, her creditors are bound by the same restrictions. We find no merit to this argument.

Both the Congress and the General Assembly, had they deemed it necessary, could have provided that the proceeds from a guaranteed student loan would be exempt from execution and garnishment. A typical example of such express exemption is found in 42 U.S.C. § 407, relating to social...