Many filings of bankruptcy in Tennessee are not the best solution to debt problems. When a person filing bankruptcy claims to be "judgment proof," creditors cannot legally obtain any money or property from the debtor as collections. Before creditors can garnish wages or seize property, they must obtain a judgment to do so. Therefore, choosing to file bankruptcy as judgment proof can depend on the amount and kind of debt, timing of filing, and whether settlement outside of bankruptcy court is the better option. To be judgment proof, there are a few characteristics that a debtor has to have when filing.
Own too little property or only property that is government protected. If there is nothing for your creditor to auction or sell off, such as land or homes, he cannot obtain this property.
Know what assets your creditor cannot collect. If you are living on Social Security or disability and have no assets of significant value, you are considered judgment proof.
Make sure that whatever wages or property you have are protected under property or wage laws that exempt it from being collected. Your creditor cannot garnish disability, retirement and government-funded money as wages because they are protected income.
Do not increase your debt any further after filing. If you have no further bills to add to those you have already accumulated, that acts as a factor in your being declared judgment proof.
File the bankruptcy claim later than sooner. Determine how much debt you have before filing to be completely sure that future filings will not be necessary, because it will be difficult to attain judgment-proof status more than once.
- Also, confer with an attorney beforehand to be sure that bankruptcy is really the right choice. Prepare questions for your attorney to be ready for any discrepancies that might arise. Let your attorney know personal information beyond just debts to make sure that creditors can find no loopholes to find you non-judgment proof.
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