What does it mean to say someone is "judgment-proof?"

We frequently hear opposing counsel tell us that the debtor is "judgment-proof." Most of them have no idea what they are talking about. We especially enjoy it when opposing counsel is a family friend of the debtor and tells us something like, "I've known these people a long time, I (insert: go to church with them, live next door to their parents, dated their sister, etc.) and they just don't have anything. They are Judgment-Proof."

This lawyer isn't usually a collections specialist. Frequently they are family law attorneys, personal injury attorneys, attorneys who work with a big national firm or even work as in-house counsel for a company. Do you you think they've ever seen a client subjected to the forensic accounting that is post-judgment discovery? The answer is no. They have no idea what's coming. Most of the time, these debtor's are not judgment-proof. And they cannot withstand the close scrutiny of post-judgment procedures.

But some debtor's are referred to by us as "judgment-proof." What does that mean? In simple terms, it means we don't see an avenue to collect sufficient funds to warrant the client expending resources for now. So we close the file "for now." We explain our rationale to the client and we'll come back to it in a year. Or two, or whenever. But the issue isn't dead.

So fine, tell us you're judgment-proof. We're game.

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