If you have fallen behind on a bill payment, your creditor will have the right to attempt to sue you and collect the past due amount through a judgment. If approved, the creditor will have a variety of ways in which they can collect including withdrawing from your bank accounts, forcing you to sell assets, or receiving money directly from your paycheck. However, there are situations in which you could be judgment proof, which can help you to protect your income or assets.
Judgment Proof Income
One way in which you could be judgment-proof is if you have a source of income that qualifies to be exempt from the judgment. There are a number of different types of income that meet this qualification. This can include social security income, government retirement benefits, child support, or other forms of public assistance. If you earn income from any of these sources, your creditor cannot legally claim it. Furthermore, the amount they can take from any form of income is normally limited to 25% of your net income.
Another common way that a creditor will access your funds after a judgment is by levying your bank accounts. However, if your bank accounts include funds that have come from one of the protected income sources, the creditor is not legally able to access those funds. If the creditor does take money from these accounts, you can demand repayment and receive the money back immediately.
If you have been deemed liable in a judgment, contact us to learn more about which of your assets or income sources could be judgment proof.