In my practice as a bankruptcy lawyer at The Botelho Law Group I look at every potential client’s particular set of facts and analyze not only the different chapters of bankruptcy but also the alternatives to such.  In Part I of this series I discussed debt settlement vs. debt management.  In this second part of a series of articles dealing with alternatives to bankruptcy I am going to explain one of the very few situations where a reasonable course of action is to actually do nothing.

A very important note to point out right at the start of this article is that I very rarely ever advise a client with financial problems to “do nothing”.  What you are about to read only works in very specific cases.  Please seek the counsel of an experienced bankruptcy lawyer who has knowledge of not only alternatives to bankruptcy in general but has a solid understanding of how a person can be judgment proof as well as how to properly analyze your specific set of facts.

A person may be considered judgment proof if their set of circumstances results in a situation where if a creditor were to sue them and win, nothing negative would actually happen despite the creditor having a judgment.  The typical potential client does not fit this situation, but there are some who do and it is always worthwhile to address this option and likelihood of success or failure during a bankruptcy consultation.

So when might a client be considered judgment proof? Getting a judgment and getting paid are two very different things.  A person is judgment proof when there is no way for the creditor holding the judgment to get paid.  This means that the typical legal avenues to collect on a judgment are not available to the creditor.  The ways in which a successful plaintiff in a law suit attempts to get paid include: putting a lien on real estate, garnishing wages, levying a bank account for amounts that are not considered exempt, or perhaps other means depending on what state you live in. Therefore a person who may be judgment proof does not have income that could be attached nor property that could be used to satisfy the judgment. The analysis of such is beyond the scope of this article, but an experienced bankruptcy lawyer will be able to explore if you fit within the category of being judgment proof.

Despite being judgment proof, sometimes bankruptcy may still be the best avenue.  A creditor will still be calling, mailing bills, and likely bringing you to court to review your financial situation at a payment review hearing if they have a judgment.  In my practice as a bankruptcy lawyer there have been times when a judgment proof client has decided to file bankruptcy simply to end the troubles and stress associated with a creditor trying to collect the debt.

Even if a client is judgment proof, he or she may not necessarily always be so.  In Massachusetts a judgment is “good” for twenty (20) years.  So if in the future there is a change in non-exempt income or an interest in real estate, there is still a risk of a judgment creditor to get paid by garnishing wages or placing liens on property.

As mentioned in the outset of this article, the strategy of doing nothing and relying on the fact that you are judgment proof is one that should only be done after speaking with an experienced bankruptcy lawyer.  The risks of doing nothing when a person is not actually judgment proof are massive and the results can be devastating.

Like I pointed out in the first part of this series, there is no “one size fits all” solution to debt troubles.  There are many factors that go into determining what legal strategy should be taken.  Our firm offers free consultations where I will go over your particular set of facts and analyze not only bankruptcy but other alternatives, even the rare instance when it makes sense to do nothing.


Joseph F. Botelho, Esq.

Attorneys At Law

901 Eastern Ave.
Unit 2
Fall River, MA 02723

Office:  888-269-0688


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