economy
Are you judgment-proof? Here's what it means for credit card debt.
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TL;DR
- Being judgment-proof means a creditor may not be able to legally seize your protected income or assets, even after winning a lawsuit.
- Protected income sources include Social Security, disability, veterans benefits, and some retirement income.
- Being judgment-proof does not erase debt, stop collection efforts, or prevent lawsuits and judgments.
- This status is not permanent and can change if your financial situation improves.
- Ignoring debt or legal notices can lead to default judgments and future collection risks.
- Understanding your specific protections and not mixing protected funds with non-protected funds is important.
- Creditors may still be open to negotiation, settlement, or payment plans.
- Debt relief options like settlement programs or credit counseling can be beneficial.