Judgment proof – How to become Judgment proof

Let me ask you a simple question. Did you know that when a money judgment is entered against you in court, the creditor could use various strategies entitled to them by the law to collect that judgment. So you must be ready to use the laws granted to you to stop the creditor from confiscating your assets.

How can I stop the judgment creditor from going after the equity in my home?

Protect your home against a force sale by using the homestead exemption. If you know that a creditor has obtained a judgment against you, go down to your local county recorder’s office and file a declaration of homestead. This form lets the creditor know that you are claiming your home as a homestead. Check your state laws on how much equity in your home can be exempt if the judgment creditor tries to force a sale on your home.

Is there any way I can become judgment proof?

Yes, if you have no assets for the creditor to take, it will be a waste of their time trying to pursue you. If you are elderly, make less than $292.50 per week, are living on social security, being chased by the IRS, are behind on child support payments, plan on leaving the country for good, are living on disability, or have several judgments against you, then you are judgment proof. The following income is protected against creditors:

Income protected when you become judgment proof:

  • Social Security and Social Security disability
  • Veterans Benefits
  • Retirement Pensions
  • Welfare Benefits
  • Unemployment Benefits
  • Child Support
  • Spousal Support

Assets protected when you become judgment proof:

  • Personal property not to exceed $1,000
  • Security deposit used to secure your apartment
  • Tax refund derived from the earned income tax credit
  • Tools of your trade, maximum protection 10,000 (check your state law)
  • Homestead house or mobile home (check your state law)
  • One vehicle (check your state law)

As you can see there are multiple ways to prevent your assets from being taken by the creditor by becoming judgment proof.  In order to enforce your rights, you must take action once you are aware that a judgment has been entered against your for collection.

 

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