Being “judgment proof” is a legal label that describes a person’s financial situation. It generally means that an individual does not have assets, income, or other resources that creditors can seize in order to pay a debt. Someone considered judgment proof typically does not own a home, car, or other assets, does not have a job, and does not receive regular payments from Social Security, disability, or unemployment.

It is important to note that being “judgment proof” does not mean a person is absolved from the debt they owe. Judgments are legally binding and represent the court-sanctioned agreement between the borrower and the lender. Even if a person is judgment proof, they still owe the debt, and the creditor can try to collect it at a later date.

In states that have debtor-friendly laws, debt collectors have to prove that a person has assets they can seize to satisfy the debt. In other states, creditors can garnish wages and seize property without proving that someone has the income or assets to pay a judgment. This is why it is important for individuals to understand the legal implications of being judgment proof in the state where they live.

If a person is deemed judgment proof, it does not mean that the debt is forgotten. Even if creditors cannot attach their assets, debtors are still legally obligated to pay their debts. Judgments can be renewed if they expire and creditors can always seek a court order to garnish wages. While debtors may be at some visible risk if it is discovered by the creditor that debtors have received wage increases or acquired assets, being found judgment proof does not mean that debtors are totally off the hook for the debt.

Being judgment proof simply means that, because of inability to pay or lack of assets that the court can use to satisfy a debt, creditors cannot use the court system to recover a debt or related costs. Although being judgment proof can provide an individual with much-needed relief from their debt, they should always take time to understand the legal implications of their financial situation and consult a legal counsel if necessary.