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Judgment Proof

Definition - What does Judgment Proof mean?

Judgment proof is the term that describes a debtor who is legally immune from collection of a monetary judgment for a variety of reasons. In general, someone is judgment proof if they do not have any viable assets.

The classification is not always permanent and may change if or when the debtor's financial circumstances improve.

Justipedia explains Judgment Proof

Being judgment proof is not necessarily dependent upon socioeconomic status.

In some states, people with viable assets who are facing monetary judgments can lawfully protect certain assets, such as their homes. People with viable assets may also protect them by transferring ownership or by putting them beyond the reach of U.S. courts.

Some property is automatically exempt regardless of the owner's socioeconomic status. The type of property that falls into this category varies according to state laws.

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