When someone infringes on your rights or causes harm to you from abuse or neglect, you have the right to compensation for your injuries. You can file a lawsuit against the other party for an amount to cover your expenses and sometimes, for pain and suffering. But what happens when you sue someone with no money? Will you be left with nothing?

Ability to Pay Has No Bearing on the Verdict

One thing you should know is that the lack of the defendant’s ability to pay won’t bear any weight on the judgment from the court. The judge or jury will look at the facts of the case and any evidence presented to determine if they are liable for your claim. You may be awarded a judgment in your favor even if the other party is unable to pay because the case is about their liability.

Collecting on a court order can be difficult if the defendant has no money. However, you may need to look beyond the obvious if you want to receive payment for the damages due you.

Insurance May Pay the Claim

One of the most likely sources of payment in a lawsuit is with an insurance company. For example, a lawsuit against someone who caused a car accident would probably involve the car insurance company of the driver.

Since the driver pays for car insurance, they are responsible for paying any judgments made up to the maximum amount allowed in that policy. If the judgment is for more than the amount allowed, the driver would be liable for any amount above.

This same situation works with homeowner’s insurance if a person is injured on their property due to an owner’s negligence. Businesses also carry insurance for the same purpose. If someone falls in a parking lot, the company’s liability insurance would be responsible for paying for medical bills from the personal injury.

Why a Lawsuit is Necessary When Insurance is Involved

Most of the time, the insurance provider will pay out on a claim without going to court. A lawsuit becomes necessary if there is a disagreement about who is at fault or with the amount being paid. In these situations, the court will decide who is responsible and for how much before you can collect money.

Are Others Liable?

In some cases, you may get a judgment against someone, but another entity is liable for their actions. A prime example of this is with minors. Someone who is underage would likely not have the money to pay the judgment, but their parents could be liable for their child’s behavior.

The same could be true in an employee/employer situation. While the employee may have caused the situation which led to the lawsuit, the employer may ultimately be responsible if the employee was on work time and following the direction of their employer at the time of the incident.

How to Get Money When the Defendant Has No Money

Pulling an empty pocket of a jeans

You can get a judgment against someone even if they have no money. They are considered insolvent or judgment-proof, but the judgment still stands. However, other options do exist.

Sale of Assets

The court may order the sale of assets to pay a judgment against them. Their wages may also be garnished until the judgment is paid. It can be difficult to enforce these methods though, and they are often time-consuming. It can take years to receive the amount due you because the payments made may be small.

The court may allow you to seize some assets, such as bank accounts, investment accounts, and business income as well as other personal assets for the judgment.

No Money Can Make It Easier to Win

If a defendant has no money, they may not respond to the complaint. The plaintiff will get the full judgment against them without going to trial because it is a default judgment. After the judgment has been issued, the plaintiff can begin attempting to collect on the debt.

Money in the Future

Just because the person has no money now, it doesn’t mean they won’t have any future income. This is one of the reasons that attorneys advise plaintiffs to file a lawsuit. They know that the defendant may gain access to money in the future and a judgment allows them to collect because they are legally obligated to pay. Various collection techniques exist to help those who have been awarded a judgment.

For instance, the person could get a job and the defendant’s wages could be garnished. Hoewver, social security and certain other types of payments cannot be garnished. A judgment can also be placed on a person’s property. If the property is sold, the judgment must be satisfied before the owner gets any of the proceeds.

Interest on Unpaid Judgments

Any judgment not paid in full can accrue interest until it is paid. This is another reason to file a lawsuit even if you know the person cannot afford to pay now. They will be charged interest for every day the judgment remains unpaid.

Waiting to File a Lawsuit

You may decide to wait to file a lawsuit until you know the defendant is able to pay. You don’t have to file right after the incident. However, you should check the statute of limitations in your state to determine how long you have to file against the other party. Once you go past that timeline, you cannot collect even if they have the money now to pay.

Because of this situation, many attorneys will advise you to file even if the defendant cannot pay. A claim can expire, but a judgment won’t. Of course, you must consider litigation costs and when you would be required to pay.

Repayment Plans

Sometimes, you can get a defendant to agree to a repayment plan if they have no money for the claim. They would make monthly payments, which include interest, until the judgment is paid in full. While this would be a long-term situation, it would allow you to collect on your judgment.

Keeping a Judgment Alive

If you sue someone with no money with the hope that they will have funds to pay in the future, you’ll need to keep the judgment alive. This comes at a cost and usually must be done every few years. That cost could be added to the judgment to be paid.

No Money Doesn’t Mean Poor

It’s important to understand that just because someone has no money to pay a judgment, it doesn’t mean they are penniless. Many wealthy people put their assets in a trust to prevent losing them in a judgment. Only assets in their name would be considered in a judgment.

If you are concerned about filing a lawsuit against someone who may be considered judgment proof, you should talk to an attorney with one of the experienced law firms in personal injury. They can provide solid legal advice about your next step and help you file a lawsuit that will win a judgment on your behalf. You may also get free legal help from law firms that don’t collect fees until you receive money from the judgment.