Judgment-Proof

Categories: Insurance, Regulations

You go to The Pearly Gates and someone with a long beard is standing there, and you've led a clean life, and....

Okay, okay. If someone’s got a bone to pick with you because you owe them money (according to them and the courts), and they can’t get the money back, it’s probably because you’re judgment-proof.

A creditor—someone you owe money to, because you borrowed it—can sue you if you skip out on paying them as agreed upon in the contract. If they're successful in getting a "money judgment" against you, it means they’re allowed to collect money from you via some means. Could be by putting a levy on your bank account, taking a cut of your income, or putting a lien on your house (or other property that you own).

If the creditor can’t do these things...because you don’t own a house, and your only income is benefits-based...basically, there’s just no value they can extract to repay the creditor. Legally, courts will only have creditors take a cut of your disposable income, so if you have a low-paying job and no property to your name, you could be judgment-proof too.

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