How Do You Become Judgement Proof?


Quick Answer

A person becomes "judgement proof" by rendering it impossible for a creditor to collect a judgement against him by seizing assets or garnishing wages, explains Nolo. Typically, a creditor weighs the cost of pursuing a lawsuit against the likelihood of ever collecting on any judgement. If the debtor seems to have no assets or wages to satisfy a judgement, the creditor may consider the debtor judgement proof and simply write off the debt as uncollectible.

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Full Answer

A debtor can defeat efforts to garnish wages to satisfy a judgement by not working, having a very low-paying job, or living on income that is exempt from judgement collection, such as Social Security or Supplemental Security Income benefits, public assistance, unemployment, veteran's benefits, child support, or federal employee and civil service retirement benefits, states Nolo. Federal and state laws put a limit on how much money can be taken out of a person's paycheck to satisfy a debt, so if a job is low paying, garnishment may not be a viable option to collect a judgement.

Creditors can seize bank accounts and equity in real estate, so a judgement-proof debtor must avoid accumulating these types of assets. Creditors can also try to seize certain types of personal property, but the time and expense it takes to locate the property typically makes pursuit unrealistic, unless the debtor owns something flashy such as a boat, notes Nolo.

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