Many consumers with financial hardship are relatively pleased to learn that a debt collection judgment cannot be enforced because all the consumer’s assets are exempt from levy.
For example, if you earn less than 30 times the federal hourly minimum wage, your pay check cannot be garnished. Certain tangible housewares and tools used in your professional work are likewise excluded from judgment enforcement.
However, just because you don’t have any money in the bank, and don’t own any real estate, being judgment proof does not enable you to avoid the negative stigma associated with having judgments on file against you in the court records.
If you have other credit card accounts, spending limits may be lowered and balance transfer restrictions placed on file. Higher interest rates may also be charged on financed account balances. In fact, you could receive a notice of credit card cancellation by the issuing bank. All this follows the bad stigma associated with having a credit card judgment debt pending against you in court.
Aside from triggering cross-default credit card provisions contained in your account agreements, a judgment proof debtor may be disfavored in other endeavors as well.
Landlords dislike judgments in apartment rental applications, and if you currently maintain a market-rate residential lease, your landlord could decline to renew due to the pending judgment debt as well.
An application for a promotion or new job may compromised by the negative implications linked to a money judgment. An individual with financial problems is seen as unstable, and potentially untrustworthy or worse.
For these reasons, among many others, your lack of assets may be insufficient to avoid the bad stigma once a credit card company proves their right to judgment against you.
We encourage you to send us your court documents or credit report for a free review by our firm.