Posted on: 5 March 2018Share
Before going through the trouble of filing a lawsuit, it's important to investigate the defendant to determine whether the person has enough money and assets to satisfy a court judgment if you win; otherwise you may end up with nothing but the paper saying you won the lawsuit. But what do you do when your research indicates the defendant is judgment-proof? Here are your options for dealing with this problem.
Attach a Lien to Real Property
A person is considered judgment-proof when they don't have any income or assets that can be used to satisfy a court order. For instance, Social Security payments are exempt from most collection actions, so you couldn't garnish the person's disability check to get the money you're owed. However, if the person owns any property, you could attach a lien to it, even though the item may not be paid off.
A defendant owns a home but only has $25,000 worth of equity in the property. Although it may not be enough to pay off the judgment, you can put a lien on the home, which will force the defendant to satisfy the debt when they attempt to sell the house.
If the defendant is married and lives in a community property state, be sure to look into assets the person's spouse may own. In community property states, debts incurred during the marriage are the responsibility of both parties, so you can legally go after the spouse's money and assets to satisfy the judgment as well.
Wait it Out
Another viable strategy is to simply wait and monitor the defendant's financial situation. A person who is currently judgment-proof may not stay that way forever. There's a real possibility the defendant may experience a positive change in the future that will make it easier for you to collect the cash you're owed. For instance, if the person is unemployed now, he or she may get a job in a year and you can garnish the individual's wages at that time.
The nice thing about judgments is they're valid for a fairly long time. For instance, you have ten years to collect on the debt in Ohio. In some states, the judgment can be renewed once it expires, providing you even more time to collect. Unfortunately, this means you'll have to wait to get your money, so you need to decide if this is the best option for you.
For more information about this issue or help litigating and collecting on a civil case, contact a civil litigation lawyer.