What Happens When You Sue Someone with No Money?


Updated: February 14, 2023

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You are entitled to financial compensation for any injuries you sustain as a result of someone violating your rights or causing you to harm through neglect or abuse. You can sue someone with no money to pay for your costs and sometimes for your pain and suffering. However, what happens if you use it without any money?

Ability to Pay Has No Bearing on the Verdict

The Court’s Judgment Is Unaffected by the Defendant’s Inability to Pay One thing you should be aware of is that the court will not be influenced in any way by the defendant’s inability to pay. The facts of the case and any evidence presented will be examined by the judge or jury to determine whether they are liable for your claim. Because the case concerns their liability, you may receive a judgment in your favor even if the other party is unable to pay.

If the defendant does not have any money, it may be difficult to collect on a court order. However, if you want to be compensated for your losses, you may need to look beyond the obvious.

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In the event of a lawsuit, an insurance

A company is one of the most likely sources of payment. For instance, the driver’s auto insurance company is probably involved in a lawsuit against a person who caused an accident.

The driver is responsible for paying any judgments up to the maximum amount allowed by the policy because they pay for the car insurance. The driver would be responsible for any excess amount if the judgment was for more than the allowed amount.

 

If a person is injured on a homeowner’s property as a result of the owner’s carelessness, this same scenario applies to homeowner’s insurance. Insurance is also carried by businesses for the same reason. Medical expenses incurred as a result of the personal injury would be covered by the business’s liability insurance in the event of a fall in a parking lot.

Why Filing a Lawsuit Is Necessary When Insurance Is at Issue

The majority of the time, the insurance company will pay a claim without having to go to court. If there is disagreement regarding who is at fault or the amount being paid, a lawsuit is required. Before you can collect money in these situations, the court will decide who is responsible and how much.

Are Others Responsible?

You may receive a judgment against someone in some instances, but another entity is responsible for their actions. With minors, this is a prime example. A minor would probably not have the money to pay the judgment, but their parents might be held responsible for their child’s actions.

In a relationship between an employer and employee, the same could be said. While the situation that led to the lawsuit may have been caused by the employee, the employer may ultimately be held liable if the employee was on time to work and followed the company’s instructions at the time of the incident.

How to Get Money When the Defendant Doesn’t Have Any:

You can get a judgment against someone even if they don’t have any money. All you have to do is pull an empty pocket out of your jeans. They are deemed to be judgment-proof or insolvent, but the judgment remains in effect. However, there are other choices.

Sale of Assets

A court may direct the sale of assets in order to pay a judgment. They may also have their wages seized until the judgment is paid. However, implementing these strategies can be challenging and time-consuming. Because the payments may be small, it may take years to receive the amount owed to you.

You might be able to get the court to let you take some assets for the judgment, like bank accounts, investment accounts, income from your business, and other personal assets.

No Money Can Make It Easier to Win

If a defendant does not have any money, it may be difficult for them to respond to the complaint. Because it is a default judgment, the plaintiff will receive the entire judgment against them without having to go to trial. The plaintiff can begin attempting to collect the debt as soon as the judgment is issued.

Money in the Future

Even if a person doesn’t have any money right now, that doesn’t mean they won’t have any money in the future. Attorneys often advise plaintiffs to file a lawsuit for this reason. They are aware that the defendant may gain access to funds in the future, and a judgment permits them to collect due to their legal obligation to do so. For the benefit of those who have been given a judgment, there are a variety of collection methods.

 

The defendant’s wages could be garnished if the person gets a job, for example. However, payments from social security and other sources cannot be seized. A person’s property can also be subject to a judgment. Before the owner receives any of the proceeds from the sale of the property, the judgment must be paid in full.

Interest on Unpaid Judgments

Until the judgment is paid in full, interest may be charged. Even if you are aware that the person cannot afford to pay at this time, this is yet another reason to sue. For each day the judgment remains unpaid, they will be subject to interest charges.

Waiting to File a Lawsuit

Putting Off Filing a Lawsuit Until You Are Sure the Defendant Can Pay, You May Decide to Put Off Filing a Lawsuit. You do not have to file immediately following the incident. However, if you want to know how long you have to file a lawsuit against the other party, you should check your state’s statute of limitations. Even if they currently have the funds to pay, you are unable to collect after that time period has passed.

Many lawyers will advise you to file even if the defendant is unable to pay because of this situation. A judgment will not expire, whereas a claim may. Naturally, you need to think about the costs of litigation and when you would have to pay them.

Plans for Repayment

In some cases, you can get a defendant to agree to a plan for repayment if they do not have enough money to pay the claim. Until the judgment was paid in full, they would make payments every month, which would include interest. You would be able to reflect on your judgment in this long-term circumstance.

Keeping a Judgment

Alive if you sue someone who has no money in the hope that they will eventually have money to pay, you will need to keep a judgment alive. This usually needs to be done every few years and costs money. That expense might be added to the judgment that needs to be paid.

No Money Doesn’t Mean Poor

It’s important to remember that just because someone doesn’t have enough money to pay a judgment does not mean they are poor. To avoid losing their assets in a judgment, many wealthy people put their assets in a trust. In a judgment, only assets in their name would be taken into account.

Talk to an attorney from one of the seasoned personal injury law firms۔ بf you are concerned about suing someone who may be considered judgment proof. They can give you sound legal advice۔ مbout what to do next and assist you in filing a lawsuit that will get you a judgment. Law firms that do not collect fees until you receive money from the judgment۔  may also provide you with free legal assistance.


Robert Daines

Robert Daines

Robert M. Daines is the Pritzker Professor of Law and Business, Associate Dean, and Senior Faculty for the Rock Center on Corporate Governance at Stanford. He is also Professor of Finance (by courtesy) at the Stanford Graduate School of Business. Also CEO of Dailynewsworlds.

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