What it means to be Judgment Proof Text Size:

Although filing a petition in bankruptcy might seem to be the answer to your debt problems, there are some instances where bankruptcy is not a good solution. One of those instances is called being "judgment proof." If you are judgment proof, creditors can do virtually nothing legally to obtain money or property from you. However, there are other factors that you should consider if you are judgment proof and you are thinking about filing for bankruptcy.

Characteristics of Being Judgment Proof

Creditors can't obtain money from people who are judgment proof because they are:

• Insolvent, having no assets to be collected
• Don't have enough property to satisfy the creditor
• Protected by laws that exclude wages and property from being used to satify a claim

Other Factors

Other factor to consider are:

• Are you likely to increase your debt? Most of the time the answer is "no." Debts arise most often because you lose a a job due to layoff, disability or retirement. However, it's possible that medical bills or continuing financial problems can increase debt
• Do you have a few debts? If so, the best way to approach these debts is litigation or settlement outside of bankruptcy court. If you want to go to court over the debts, you must have sufficient resources for legal actions
• Timing. Filing a claim too soon may hinder you from filing again at a later date

Making a Choice

Ultimately, the debtor must make a choice. Do the advantages of bankruptcy outweigh the disadvantages? Will bankruptcy in some way have a positive effect on the debtor's life? For some debtors, the financial pressures are so bad that bankruptcy is the solution. Other debtors just want the peace of mind that bankruptcy can give. The decision is for the debtor.

Questions for Your Attorney

• Can creditors obtain money from me if I am judgment proof?
• What are some of the characteristics of being judgment proof?
• Should I file a petition in bankruptcy if I am judgment proof?

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