Judgment Proof Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Judgment Proof, written in plain English, along with examples of how it is used.
What is Judgment Proof?
Someone who does not have to pay a court-ordered judgment to a creditor because of severe poverty.
History and Meaning of Judgment Proof
The term "judgment proof" refers to a person who is unable to pay a court-ordered judgment to their creditor due to extreme financial hardship or poverty. Being judgment proof is not a legal term, but rather a colloquial term used in the legal context to describe a debtor who has no assets or income that can be seized or garnished to satisfy a debt.
A person can become judgment proof through a variety of factors, such as low income, unemployment, or disability, which make it impossible for them to pay off their debts. In such cases, creditors are not legally obligated to forgive the debt, but they cannot take any action to collect on it either.
Examples of Judgment Proof
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In a lawsuit against a debtor, the court found them to be judgment proof, which means the creditor will not be able to collect on any judgments ordered against them.
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A person with no income or assets who has filed for bankruptcy may be deemed judgment proof by the court.
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A creditor may decide not to pursue legal action against a debtor if they are already judgment proof, as it would be a waste of time and resources.
Legal Terms Similar to Judgment Proof
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Bankruptcy - this is a legal proceeding where a debtor seeks to discharge their debts and start fresh financially.
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Insolvency - this refers to a situation where a debtor is unable to pay their debts as they become due.
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Exempt income and assets - these are income and assets that are protected from seizure by creditors to satisfy a judgment.