What Happens if You Lose a Lawsuit and Can't Afford to Pay?

byOldMCSEGuy

5.9K followers

9 years ago

What Happens if You Lose a Lawsuit and Can't Afford to Pay?

According to law, when you lose a lawsuit, the judge makes a judgment against you for the defendant’s expenses. This simply means that the defendant can utilize any source available to a judgment creditor to convalesce this amount from you.

Usually, the defendant looks for a verdict for the expenditure on the lawsuit process even if he or the jurisdiction has the knowledge that you won’t be able to pay him. In almost all the judgments the victor of the lawsuit is required to file for the registration of the judgment against you. The winning party (or the creditor) may opt for an execution when the case ends. After he registers, it becomes a debt to you.

If the judge gives his consent for the execution, the other part can charge you on the execution. This implies that it is legal for the creditor to acquire your property. They can hire a sheriff or a legal authority to fetch you a copy of the execution order and either take your car or maybe something like putting a lien on your property. And you owe to pay the creditor this debt, failing which gives him the right to take further actions against you. In a few jurisdictions, the creditor can have the right to keep possession of the property that belongs to the losing party until you clear the debt you owe.

When the creditor needs you to pay them the debt money, he can drag you back to court to take the money from your salary. He might be allowed to garnish your wages and force you into bankruptcy. The creditor can take the debt amount out of your salary paycheck before you get it in your account. He can even have your driver's license suspended until you get discharged of the debt.

But, as per law if you are execution proof the opposite party cannot have possession on any of your assets or income in spite of the judgment going against you. In such case, a part of your assets and/or part of your income is protected from exemptions. You should have the knowledge of what the exemptions shield your income or assets. Then you can convey the judge about it so that he does not order you to pay the debt from your assets and income. Be sure that your income is execution proof. And this will help you by not allowing any court to order you to pay back the lawsuit debt from your income.

In fact, it is also better that if you fail to pay the debt laid as a result of the judgment, you should try to approach the opposite party to whom you owe the money requesting for some negotiation. Sometimes it happens that the person to whom you owe debt may settle down for a working solution like a payment plan that is significantly less burden on you. But remember that if you agree to a payment plan to pay the debt from the protected income, the court will make you pay for it.