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What to Do If Your Debtor is Judgment Proof

Posted on in Debt Collection

What to Do If Your Debtor is Judgment ProofIn most cases, receiving a court judgment against a debtor gives a creditor a clear path towards debt collection. The judgment allows you to seize assets and garnish wages until you have collected what is owed to you. However, a court may still stop your collection efforts if it determines that the debtor is “judgment proof.” Also known as “collection proof,” a judgment-proof debtor is someone who lacks the minimum income or non-exempt assets to collect from. This person could be without a job or meaningful assets and surviving on public benefits. What can you do if a debtor is judgment proof?

Understanding What Judgment-Proof Means

Federal and state laws provide exemptions for debtors who are facing debt collection or have filed for bankruptcy. In Illinois, these exemptions include:

  • A homestead exemption for as much as $15,000 of equity in the home, or $30,000 if owned by a married couple
  • Wage protection if the debtor’s weekly income after taxes is less than 45 times the Illinois minimum wage
  • Protection for public assistance, retirement benefits, injury awards, and unemployment insurance
  • An exemption for one motor vehicle whose interest is not greater than $2,400
  • A $4,000 wild card exemption that can be used on its own or combined with other exemptions

A person is deemed to be judgment proof when they have no income or assets available after these exemptions.

Keeping Track of the Debtor’s Financial Situation

A person’s status as judgment proof is often temporary. It may be that the person lost their job or was unable to work due to injury or illness. Once their financial situation has improved, you may be able to move forward with debt collection as long as your debt judgment is still valid. Debt judgments in Illinois are enforceable for seven years. If your judgment has expired or is about to expire, you can file a petition to revive in order to receive another seven years.

Contact an Illinois Debt Collection Lawyer

If you believe your debtor’s financial situation may make them judgment proof, it may still be worth the effort to file a lawsuit against them. Some debtors in this situation do not bother to contest the lawsuit, allowing you to receive a default judgment. Having a debt judgment against the debtor will enable you to take immediate action when the debtor has income or assets that can be collected. A Chicago debt collection attorney at Walinski & Associates, P.C., will advise you on your best options for dealing with debtors who are in default. Schedule a consultation by calling 312-704-0771.


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