Many people who receive a notice of a pending lawsuit for defaulted credit card may have heard that the opposing party can’t win because they are “judgment proof”. This question comes up all of the time – “I’m being sued but I’m judgment proof – do I need to do anything?” The answer is definitely YES!
The majority of lawsuits filed against consumers for defaulted credit card debt comes from collection agencies. This debt is purchased from credit card companies or as large bundles of debt from other junk debt buyers. Very little information about the debt or the consumer is attached to individual debts.
Due to this lack of information, there is very little knowledge (if any) whether or not the consumer has any money – and most of the time the collection agency doesn’t care. In a dAt the trial, do you think the the judge says “Oh, they don’t have money – case dismissed”? Nope. Judges rule based on the law (or at least that’s the theory). I can guarantee there is no law that dictates that a case be dismissal or granted based on a defendant’s income.
Post judgment, there will be a hearing about what assets you have. If you are a hardship case, you may be able to avoid having your wages garnished or assets seized after a judgment is granted by getting an exemption.
At this hearing, your assets are reviewed. There are federal and state laws regarding garnishments, and what is exempt from garnishments. If you have assets eligible for garnishment, the judge will enter a writ of garnishment against you, and your creditors can apply to your employer or bank to get payment.
If you can’t pay, the judge will not issue a court order garnishing wages or seizing bank accounts and may issue an exemption. Here are some examples of what is exempt:
- Social Security benefits
- SSI benefits
- Welfare benefits
- Veterans benefits
- Workers and unemployment compensation
- Life, accident and health insurance proceeds
- Some pensions
If you are exempt – you may not have to pay the money awarded to the plaintiff, but you’re still going to be paying a penalty – a very large blemish on your credit report. In addition, judgments are usually good for 10 years or more. If the plaintiff learns at a later date that you currently have garnishable assets, they may reapply for – and get – a writ of garnishment.
At the bare minimum, you should always respond to a summons/complaint. If you don’t respond, you automatically lose the suit. It’s really not that difficult to answer a suit, and at least initially, does not require a lawyer. We’ve written an article called “I’ve Been Sued” that you should read to at least understand the process.
I don’t want people to think they don’t have to do anything because they’re “judgment proof”. Nothing could be further from the truth.
Have you been exempted from a garnishment? Successfully defended yourself in court? Tell us about it by leaving a comment!
Hey there,
I am being sued by Citibank, or their representatives, and am wondering about what they can take from me after judgement? I lost my little brother last january, and I inherited his truck (nothing fancy or new, but I Love it…) Can they take it from me?
Re: “Judgment proof”
I’m 68 and have a SS check for 564 per month. No car, no house, no nada. A modicum of investigation would verify these facts. Now, why wouldn’t a CA want to know these facts before going to court? Especially if they realized they would be fought each and every step of the way? I can’t imagine being sued if this knowedge was theirs, although I wouldn’t mind being sued, since I’d like a crack at some justice, my justice in just exposing their tactics and the sorry mess that’s created, perpetuated, and allows this kind of institution to exist and thrive.
A doctor examined a relative in a way that was rude, demeaning, and unsafe. I wrote a complaint letter to the doctor’s hospital and to the state Board of Medical Practice. The doctor has sued me for defamation of character ($50000) and interference with business ($50000) and unspecified punitive damages. His lawyer has a history of strategic lawsuits against public participation. I can’t believe I’ll actually be assessed damages, but I have to submit to answering the complaint, giving discovery, and answering interrogatories. I live in a state that allows hip pocket lawsuits. I own a home, get pensions from 2 Federal agencies (OPM and military), get Social Security. I have no savings, but my wife has an IRA. Plaintiff’s lawyer keeps asking for my homeowner’s policy, but I don’t carry liability insurance. Am I “judgment proof?”
Is there some sort of documents or legal letters to submit like of bankruptcy before i can deem myself as judgment proof? Or I can just deem to be judgment proof to my creditors?
Is there some sort of documents or legal letters to submit like of bankruptcy before i can deem myself as judgment proof? Or I can just deem to be judgment proof to my creditors?
Is an IRA exempt from garnishment with a judgment? Thanks!
Linkin, you need to give that doctor and his scumbag lawyer a proper beat-down.
A ski mask and a pick handle would be a good start.
I left U.S in 2010 thinking I’m going away for 3 months and haven’t come back yet. I live overseas with income of $400 a month. Have no bank account, no job, no property in U.S. Basically nothing. I’ve been sued by FIA card services I don’t know for how much since I haven’t been served. I only know because I did a case search on myself. Can they enter a judgement against me? Anyway I can contact the court from overseas and tell them I am not in U.S anymore and have no jobs or assets?
Thy can try and get a judgment against you, but if they do, you can probably get it vacated in court for improper service.