I’m ‘Judgement Proof’: Can I Ignore My Debts?

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It’s true that the phrase “judgement proof” does exist in the financial world, but expression is a bit of a misnomer, and can lead some debtors into thinking that they are simply not responsible for any of the money that they owe.

When you owe any creditor(s) money and have not been making a good faith effort to pay them back, they will eventually sue you in court for the amount that you owe. What results from that type of lawsuit is called a judgement – the official decision and result of the judge who is assigned to your case. The judgement will allow your creditor to collect the money they are owed in a variety of ways: via wage garnishment, bank account levy, frozen assets, real estate lien, repossession of your vehicle, and more.

There are certain types of income that cannot be garnished by a creditor, including: Social Security Disability income, child support, alimony, unemployment benefits, public assistance income, Veteran’s benefits, worker’s compensation, and Federal/Civil Service retirement benefits. Any money that you may have in your bank account that has come from any of these sources is exempt from being frozen, as well.

Additionally, if you are unemployed or if your income is extremely low, your creditor will not be able to garnish your wages. After all, you can’t squeeze blood from a stone. In this case, your assets would be the next place your creditor could turn in order to recover the money you owe. If you do not own any real property, a car or anything of any significant monetary value, you are now what is considered to be “judgement proof,” because your creditors will be unable to get any money out of you to make good on the judgement.

It may seem like you’ve beat the system at this point, but that just isn’t the case.

Judgements against you aren’t temporary – court systems have dealt with non-paying debtors time and time again, and they want the person (or organization) who won the judgement to be able to get the money they are owed. Most New Jersey judgements are good for twenty (20) years.

If, in the coming 20 years, your financial situation changes (i.e. you get a better paying job, inherit money or assets, etc.) – that money will go directly toward paying off the judgement. Imagine looking over your shoulder for the next TWO DECADES, wondering where and when your creditors will finally be able to make good on that judgement.

So, although you may be “judgement proof” at the moment, your creditor(s) can still sue you, and a judgement can hang over your head for a very long time. The best decision you can make in this situation is to wipe your debts clean and get a fresh start before a judgement is entered against you. Dealing with out-of-control debts swiftly will allow you to move forward and make career advancements, buy a home and vehicle – without worrying about having your money or assets taken away.

To learn more about New Jersey bankruptcy and how it can change your life for the better, contact a NJ bankruptcy expert – the sooner, the better.

Image credit: Stock Monkeys

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4 Responses to I’m ‘Judgement Proof’: Can I Ignore My Debts?

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