Help! I Have a Judgment and Cannot Pay

If you have a judgment on your credit report, or on file as a public record and you have made numerous attempts to negotiate with the creditor to no avail, and they still are unwilling to accept partial payments from you, you may be at a loss about what to do. If yours is a case of simply not being able to pay the debt, the creditor may take you to court. If your case makes it to court, and you have no legal defense, more likely than not, the creditor will win and a judgment will be ordered against you. What happens after that point, you ask? This article gives you the details on what needs to be done in order to remedy the situation.

Anytime that a court ordered verdict is entered, it allows the creditor to legally come after any assets that you may have. However, just because a creditor has gone through the process of getting a court order doesn't mean that he will be able to collect any money from you. The laws vary in each state, but in most of them, the laws are very specific concerning what a creditor can and cannot touch in an attempt to recuperate his monies. This is one of the many reasons that a legal proceeding is held.

On the day of your hearing, you will need to bring certain documents such as pay stubs, tax returns, bank statements, etc. These items will then be examined by the Prosecuting Attorney in an effort to determine what your income is and what private assets you own. At that time, if it is determined that you have no income or property that your creditor can take, the Court will have no choice but to order the claim to be essentially worthless. In this case, you are considered to be "Judgment Proof". As you can plainly see, whenever you have a judgment against you and you have few if any assets, this should cause you to feel less intimidated by your creditor.

Now that you have the information about what can possibly happen if you ever have a judgment against you and you cannot pay. Please keep in mind the fact that each and every State is going be different when it comes to placing a value on any assets that you may have, and it may still be possible for you to have a certain amount of income and assets including a house with little equity, personal effects, a cheap car, and some private property and still be untouchable by the court's verdict. But to be safe, it is advised that you speak with an Attorney in your State so that he/she can help you determine your specific asset situation, because each and every state will have its own asset schedule.

This is an interesting side note: once upon a time in the United States, and also in the United Kingdom, there was a thing known as "debtors' prison." This is where people would be sent when they were unable to pay their debts. These laws were later changed in the United States, and the United Kingdom between the years 1833 - 1869, respectively. Thank God that today there is no such thing as incarceration for unpaid debts unless your case happens to involve cases of child support, alimony, or fraud.