When are you judgment proof?

[BROKENN]

I have heard the phrase judgement proof. What does that mean?

If you are served before BK, but no court date until after the Stay, is that judgment proof?

[AngelinaCat]

You are Judgment proof (actually a more correct term is Collectible proof) when you are in a position that no holder of a judgment can levy on and seize your property. Example, automobile: you own a 2004 XWZ Whatever, that was paid off, but you borrowed $20,000 using that car as collateral (or you could still owe the some of the mortgage on it). Any judgment holder interested in levying and seizing that car will first, have to file papers with the court stating intentions to do so, which costs money, fees, all that. But once they wade through all that morass, to seize this car and take it from you, THEY HAVE TO PAY OFF ALL THE MONEY OWNED ON IT.

Now I am talking private people, private situations. Banks, CUs, and car dealerships--I don't know.

Real estate is a different animal. Here in Florida, we own land (sort of) and are homesteaded on it. We can't be kicked off w/o very good reason. One is to not pay the land taxes each year. After a certain time period, the tax deeds go on sale, and after someone buys those tax deeds and pays the delinquent taxes for a certain period of time, conceivably can own YOUR land and get you off of it.

About 25-30 years ago a land speculator came into Florida and started buying up the tax deeds for poor, illiterate Af-Americans who had had no clue their land was in danger. I believe this person went to prison and the laws reformed somewhat.

In our case, I said we own the land (sort of) because we actually have sold our land to a state entity, but we have retained a Life-Estate. That means we come and go as before. Keep everything insured as before, and are Homesteaded. We also have to keep paying the property taxes. We also had it written the contract that we can never borrow against the land. That was for ours and the land's protection. Now, if a Judgment holder wants to try to seize our land--even if we can't pay the land taxes, the Judgment holder runs up against the state entity that actually OWNS the land.

Have I helped answer your question, or have I really mucked it up for you?

And every state is a little different.....

[BROKENN]

I am still confused but I appreciate you wading through with me
OK, so I understand the collareral aspect. What about the judgements wanted by being summoned, like a CC..... Is this totally different..... is judgement proof is only collateral based? Does my question make any sense?

[AngelinaCat]

And I should add, being Judgment proof really isn't that great, depending on your age and situation. A judgment can stay on your record for up to 20 years, making it difficut to own anything in your name. If you have a really aggressive Judgment holder, that person can track your purchases and potentially lien against anything you buy and seize it. Not to mention the judgment on your credit report is going to harm your ability to get loans.

'Hub and I, in our situation, and at our ages--64 and 56--are apt to be hit with a judgment eventually from our enemy--a sociopathic cyberstalker spoken of in an earlier thread. But we were fortunate enough to have made our wills, Trusts, and Estate Planning goals a reality, long before this other mess ever started.

Good luck.

[AngelinaCat]

I am still confused but I appreciate you wading through with me
OK, so I understand the collareral aspect. What about the judgements wanted by being summoned, like a CC..... Is this totally different..... is judgement proof is only collateral based? Does my question make any sense?

Hi, I'm still here. What are your debts? Are they primarily CCs?

[BROKENN]

Yeah, and the people that are **innocently** hurting you are p!ssing me off!! I am glad that you two are trying to get as far away as possible from any connection they may have to you!

Anyway, *****composes oneself*********

Oh, so you are talking about a whole different definition of judgement?
Not a Court Summons to collect an unsecured debt?

[AngelinaCat]

As I understand it--and other posters will jump in to correct me--if your debts are CCs and they get a judgment against you, all they can garnish is your wages. But if you are Head of House and only bring in $499.00 a week, they can't levy. If you bring in $501.00 per week, they can go after that penny. (They won't--too small) Retirement and Disability, and [perhaps] Unemployment Compensation should not be able to be touched.

BIG DISCLAIMER: This is the way I understand how this works. If I am wrong, I am all ears!

IRS [the Infernal Revenue Service, as my Dad called it] can levy on anything they want to. 'Hub and I are dealing with that prospect right now.

[AngelinaCat]

Yeah, and the people that are **innocently** hurting you are p!ssing me off!! I am glad that you two are trying to get as far away as possible from any connection they may have to you!

Anyway, *****composes oneself*********

Oh, so you are talking about a whole different definition of judgement?
Not a Court Summons to collect an unsecured debt?

I was actually responding to what I thought was a broad question. My latest post has narrowed the scope a bit. Would you like me to lead you through the steps of our two judgments that we stalemated with the BK? They are collateral, not CCs.

[BROKENN]

We got a court summons for one unsecured debt for health in the business. But I filed before the court date and found in my schedules that the atty had pieced apart the charges so it was explicit on the forms what charge came from what $4K turned into $12K, was unbelievable.

[BROKENN]

Sorry for the cross posts.

It was a general question because I have heard it on the forum and also jugdements as being sued. So just clarifying.... then I got to mine, of course

OK, so you described the other too. Garnishment, etc... which I thought. So two definitions. If you would like to explain the other (nothing you don't wanna), I am sure that we all could learn!

[AngelinaCat]

I know I am bad at math but how 4K can become 12K is *interesting*. Perhaps if this was health related, the insurances were kicking in at different times...?

I had a bad fall in August 2007 and broke my right arm and left knee. Then November 3, 'Hub cut himself with a skilsaw and got lifeflighted in a helicopter ride he didn't get to enjoy.

At the time we filed, we had no idea what the final charges would be, so the attorney put in a place-holder figure of $1.00 in each applicable slot. Everyone was notified, and the creditors filed their claims. And so far as I know, they were all discharged.

[BROKENN]

Good planning, I noted the $1 awhile ago

A health card that did the real costs not the premiums. I also hurt myself a few years back and needed chiropractic care. The amount added interest and legal fees. On top of the straight $4k!

[AngelinaCat]

I have to say, while many chirparactors are very good people and do much good, I got tangled up with in in 1996 that did not help my situation.

I will be glad to give a time-line of our experiences with creditors attempting sue. These both involved automobiles, but the civil court situation is probably very much the same.

[PoorGrammyinBK7]

"Judgment-proof" is a misnomer. You can have judgment liens recorded for many years (time varies state-to-state). The term is used to describe a debtor who is virtually impossible to collect on. That would mean the debtor has no significant assets (except for exempt ones - exemptions vary from state-to-state). No business, no bank accounts, no real estate (except if it can be protected by homestead exemption), no "toys" - such as boats, valuable cars, etc, no receivables, no inheritances ......... etc, etc.

One might be fairly "judgment proof" now, but if he desires to improve his financial position, he could never really acquire much property or money, without the worry that a judgment creditor would be lurking about ready to pounce a levy on some property.

Thankfully, most judgments go away in BK (there are exceptions, like child support, judgments because of fradulent or criminal behavior, etc).

[BROKENN]

Thanks for all the help you two!

So a judgment can go away with BK and the trustee sees you have nothing, hence a non asset case