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What Happens if I Can’t Pay a Judgment?

When defendants in a court case lose, they may find themselves on the receiving end of a court judgment that includes financial damages owed to the plaintiff. Usually, the courts include payment terms with their verdicts that spell out how much the defendant owes and how soon they must pay it. Sometimes defendants must pay it one lump sum, while other times they may be permitted to distribute what is owed to the plaintiff in installments over a set period.

Regardless of whether the expectation is paying in full immediately or on a payment schedule, what happens if a defendant cannot pay a court-ordered financial decree? Failure to make the mandated payments or reach out to the court to make other arrangements can land defendants in serious legal trouble.

Classifications of court-ordered judgments

Trying to figure out how to pay a court-ordered judgment requires understanding the kind of ruling the judge issued. Here is a cheat sheet to help explain some of the most common types of judgments against defendants.

  • Default judgments are the natural consequence of failing to respond to a lawsuit in time. This is never a good thing, because the plaintiff usually ends up getting everything they asked for in their lawsuit since the defendant made no effort to refute their claims.
  • Renewed judgments mean the plaintiff has refiled an unsatisfied judgment against the defendant before the original expiration date.
  • Satisfied judgements mean any damages owed by the defendant have been paid in full.
  • Stipulated judgments are the alternative to a full judgment and signify that the plaintiff and defendant have come to an agreement to settle. It can be in one lump sum or through a payment plan.
  • Unsatisfied judgments mean the defendant has failed to pay the court-ordered restitution to the plaintiff.
  • Vacated judgments are the best possible outcome for defendants. They signify that a decree was wiped from your record as if it never existed. Defendants can make motions to vacate any judgment against them but may not be successful depending on the circumstances.

What is judgment-proofing?

Defendants who truly cannot pay restitution against them may qualify for judgment-proofing. When a person does not have enough assets for a creditor to seize when a court order requires payment, they can request this status from the courts.

Usually, people who receive judgment-proof status have no assets or employment, nullifying their ability to pay. Disability, social security, and unemployment benefits do not count as assets, so the court cannot seize them from defendants to help settle their debts.

It is important to note that judgment-proofing is not a permanent status. Plaintiffs can continue to try collecting on court-ordered damages.

Steps to take when defendants cannot pay

Lawsuits are not based on whether defendants can pay. They are based on whether the plaintiff has a reasonable case in which damages are owed. The worst thing defendants can do is to ignore monetary rulings against them. Failure to pay or file motions with the court to indicate an inability to make remunerations can earn defendants a visit from local law enforcement. Plaintiffs can contact a city marshal or county sheriff and request an execution from the court. Execution orders allow enforcement officers to seize money, property, and other assets from the defendant to ensure the judgment is paid unless the defendant was granted judgment-proofing status.

When plaintiffs cannot legally access money from defendants, jail time might be on the horizon. Defendants receive an order to attend a debtor’s examination, during which time the plaintiff’s legal counsel can ask questions about their financial status. Failure to show up can leave defendants in civil contempt of court, which can land them in jail.

A better approach when defendants cannot pay judgments against them is to notify the plaintiff. This can and should be done through legal counsel to ensure they meet all legal requirements for making the notification.

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