Judgment Proof


DEFINITION of proof of judgment

Proof of judgment is a description of a person who does not have enough assets for a creditor to be able to seize them when a court decision requires the repayment of their debt. A broke and unemployed debtor is on trial. A debtor who only has certain types of legally protected assets or income is also subject to judgment. State laws determine assets and the amount of wages that cannot be collected despite a judgment. Being put to the test of judgment, also called “proof of collection”, is not permanent. Judgments can be valid for many years, and creditors can continue to seek what the judgment authorizes long after winning a lawsuit against a delinquent borrower.


Suppose someone – call him Mike – gets too sick to work and uses a credit card to pay for living and medical expenses for a year. He recovers from his illness and returns to work, but he cannot afford to pay off the debt he has accumulated. The credit card company fails in its debt collection efforts and then sells Mike’s unpaid debt to a collection agency. The collection agency contacts Mike several times, but he doesn’t pay them anything; he finds it difficult to hang on to his house, buy groceries and keep the lights on.

As a last resort, the collection agency sues Mike and obtains a judgment against him for the unpaid debt. The agency now has a court order requiring Mike to reimburse an amount the court has determined to be valid.

However, because Mike earns barely more than the minimum wage, his salary cannot be garnished, and because he lives in a state that protects his principal residence from creditors, the collection agency cannot set a lien on his house. Mike has no money in the bank and does not own a car or anything else that can be seized and sold to pay off his debt. Mike is currently on trial for judgment.

If Mike’s financial situation improves next year and he begins to earn much more, the collection agency may then be able to seize a percentage of his salary to start recovering what is owed to him. They may even be able to collect the debt if their situation improves several years later, as judgments can remain valid for a long time and renewed once they expire.

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