A defendant may be judgment-proof through insolvency, exempt assets, or offshore placement. Exemptions vary by state and cover homestead, retirement accounts, and specified personal property.
Insurance is frequently the only recoverable source.
Alternative Names:
Judgment Proof|Collection-Proof
Why it Matters?
Asset investigation before extended litigation prevents spending on a judgment that cannot be collected, which is a proportionality assessment worth making early in any case against an individual or small entity. Insurance limits frequently define the realistic recovery ceiling regardless of the defendant's other assets. Homestead exemptions in several states are unlimited in value, which places substantial equity beyond reach.
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Frequently asked questions
Why investigate assets early?
What defines the realistic ceiling?
