Judgment proof

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The term judgment proof is most commonly used in tort and contract law contexts to refer to defendants or potential defendants who are financially insolvent. Even if a plaintiff were to secure a legal judgment against an insolvent defendant, the defendant's lack of funds would make the satisfaction of that judgment difficult, if not impossible, to secure.[1] In such cases plaintiffs might move for wage garnishment based on the judgment. However, if the debtor is living on income from social security benefits, a retirement pension, or other social welfare, then this may not be possible, as such income is often subject to legal protections against garnishment by creditors.[2]

Being "judgment proof" is not a defense. If sued, the defendant cannot claim being "judgment proof" as an affirmative defense. The term "judgment proof" instead refers to the inability of the judgment holder to obtain satisfaction of the judgment.

An individual who is unidentifiable or has left the jurisdiction is often considered to be judgment proof, especially if it is a jurisdiction where it would be difficult to enforce judgments.

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References[edit]

  1. ^ "What It Means to Be Judgment Proof". lawyers.com. Retrieved November 25, 2012. 
  2. ^ "Creditors Seeking Federal Benefits in Your Bank Account? Understanding Your Rights". Federal Trade Commission. Retrieved November 25, 2012.