Can A Creditor Sue?

Even though creditors may get judgments, they may not be able to collect. If the debtor doesn't own a home, are unemployed, don't have money in the bank, and other possessions aren't worth much, they may be "judgment­proof" .The debtor can't be put in jail for not being able to pay their debts. Even after getting a court judgment, the creditor can only collect by going after wages and bank accounts (garnishment) or by taking property (execution). In either case, creditors can't take everything. There are laws setting limits on the amount of the property and wages that creditors can take. Generally, a creditor who has gotten a court judgment against the debtor can take some property if the debtor owns a home with more than $6,500.00 equity (current market value minus amount owed) or have belongings worth more than $1,500.00. For rent, up to $2,500.00 worth of certain belongings (such as a car) may also be exempt. A judgment creditor can't garnish wages if they make less than 30 times the minimum hourly wage per week.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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