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A:
People in deep debt worry constantly about what creditors can do to them if they sue and get a judgment for the amount owed. What can be taken away from them in a wage execution or bank levy? Well, most of the time, the answer is quite a bit. However, there are some people that are so badly off financially that creditors really cannot get any traction against them to collect. This is what is called being "judgment proof."
In New Jersey, there are certain limitations on what creditors can and cannot do to collect. For example, with wage executions, they cannot attach
If your income sources consist of only one or more of these, then a creditor cannot attack it.
Bank levies can only be brought against accounts in your name that contain money of yours. So if you have no accounts in your name, or there is one joint with your spouse or other family member, but you do not deposit any money into it, creditors cannot take it. There is also an argument that bank accounts that contain solely money received from one of the above sources that it cannot be seized by the creditor.
If you do not own real estate or own it jointly with a non-debtor spouse, then a levy against real estate would be impossible in the first instance or impractical in the second. This is because property held jointly by a married couple in New Jersey is done so with an unbreakable right of survivorship. This means that if the debtor spouse dies before the non-debtor spouse, the surviving spouse gets sole ownership of the property, even if the debtor spouse's interest had been previously sold by a creditor. This makes a sale of that interest risky to the point of being unmarketable.
This is not to say that you should ignore debts if you find yourself to be judgment proof. This is because, hopefully, things may change. What happens if you turn your life around because you find a job, are no longer disabled, or inherit money? What if you decide to buy a home? Judgments in New Jersey can stay around for quite awhile, and can act as liens on real estate owned now or in the future, for 20 years. You may be brought up short if you try to refinance your mortgage or sell your home.
Being "judgment proof" is, in most cases, a temporary condition and should not be used to ignore creditors. If you find yourself being hounded by creditors taking you to court, call my office at 888-857-8418 or contact me through this site to schedule an appointment for a free consultation about bankruptcy. It may be the only way to move on and stop living with debt.
Have more questions about bankruptcy? Get the answers to the most frequently asked questions by downloading my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey. It will give you the answers you need all in one place. Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.