Judgment Proof or Collection Proof?

[crashzx]

Hey all....I have been reading about being "judgment proof". Could someone please explain? Just wondering if I/we were. Not clear on this.
Thanks

[AngelinaCat]

Actually it should be called "Collection Proof". This is where when someone gets a Judgment against you, and that person cannot collect any money. This can take any number of forms. Your home might be homesteaded, which means your home can't be taken away from you. The state you live in might have laws in place that prevents garnishment from wages. Also, retirement income, social security and disbility benefits are exempt from collection attempts.

Even so having a Judgment agaisnt you is not a pleasant experience. A judgment holder can initiate Discovery proceedings in which they can compel you to disclose your assets, if any. Even though you may have none, it can be an unpleasant experience. If you have an automobile that exceeds the state's allowed exempted value, the judgment holder can initiate proceedings to get that automobile seized by the sheriff for sale at auction to help satisfy the judgment. If the judgment holder is mean enough, he/she can continue these type of proceedings and harass you to death. Also, a judgment can be renewed at least once, possibly more depending on your state.

[AngelinaCat]

Hi crashzx: I changed the tile of your thread so that it will get better coverage and responses.

My Best~~~

[crashzx]

Thank you....I was just curious about if I was or not. I think not because I have a job with income but dont understand it enough.

[2manybills]

Hey crash - the bigger thing I would worry about is that while your house may be homesteaded, they can record a lien (in California they call it an Abstract of Judgment) in the County where you live or in any County in the State. Then if you buy or sell property in that State, they will have to be paid in escrow plus interest.

It is true about attaching any assets that you may have as AngelinaHub posted, i.e., bank accounts. As far as a car goes, it would have to be a car that was worth their while to pick up because most cars have liens on them already that would have to be satisfied and also the sheriff requires a large deposit to levy on a car.

Judgments can be renewed every 10 years. IMO, they can follow you around much longer than a BK can.

[crashzx]

Thanks...I will be filing soon. I dont want that!!