How can a Judge order you to pay money you don't have

[steppinthrax]

I've always been curious. If you sue someone and the judge orders that person to pay up, lets say it's in the millions (20 - 30 million) and it's obvious they don't have that kind of money nor they make anywhere next to it. How does a person pay this? I understand they would likely make monthly payments???

 

[_Rick_]

This is decided on a case by case basis, I would hazard.
Usually you would want to cooperate with the court, and divulge your income and liquidity, and then you'd be assigned a plan on how to pay up.

The more interesting question is: do your children inherit that specific debt? As far as I know, normal debt would be tied to an object and therefore inherited by whoever inherits the object (at least with major debt, for cars and houses etc.) while minor debt would probably be paid off through liquidation of assets.
But a multi-million dollar order sounds like a rather undesirable heirloom.
I can imagine, that if nobody wants any of the heritage, all of it is liquidated by the state and liquidated, much like a bankruptcy?

 

[zokudu]

This is called being "Judgment Proof" I believe. http://en.wikipedia.org/wiki/Judgment_proof

Essentially the court and the person suing them can do nothing if the person does not have the money but the person who owes the money is still liable if they ever do receive money or assets in any form. Wage garnishment I believe is only legal in some states meaning if someone is Judgment proof it is not difficult to work the system and stay that way if you have one against you.

EDIT. I was wrong only 3 states do not allow wage garnishment. http://en.wikipedia.org/wiki/Wage_garnishment So if the person is "Judgment Proof" and gets a job you could motion to garnish their wages at the rates listed on that wiki page.

Also as far as the child thing as far as I know children are not liable for any of their parents debt unless they choose to take on the debt. Even if say your parents give you their house upon their death, if it is not paid off it is your choice to receive it. Anything non asset related (other than taxes I believe) is absolved completely unless the child chooses to acquire that debt. Of course creditors have first call on all liquid assets from the estate before the Executor is allowed to deal with the rest of it.

 

[steppinthrax]

So lets say I sue someone that makes only 60K a year and the judge orders them to pay 20 million. They don't have this in any way shape or form. How would they make payments on this. It seems the person would just suffer for the rest of their lives, making payments.... The only way they would leave the debt is die or leave the country?

 

[zokudu]

There is a maximum the court can require them to pay, either by state or federal law but yea unless they choose to lose their job or pick up and move they are forced to pay that every week/month until they die.

 

[Jeeebus]

The only way they would leave the debt is die or leave the country?

Bankruptcy. Unless of course your judgment is one of a few types (e.g. fraud) that cannot be discharged in bankruptcy. Or you manage to block the discharge.

I've said it numerous times before on this forum - you can sue anyone in the world for billions of dollars. What matters is whether you have any hope at all of collecting. That's why people don't sue the janitor that mopped the floor but forgot to put up the warning signs. They sue the store, the corporation, the board of directors, etc.

 

[Zeze]

Bankruptcy. Unless of course your judgment is one of a few types (e.g. fraud) that cannot be discharged in bankruptcy. Or you manage to block the discharge.

I've said it numerous times before on this forum - you can sue anyone in the world for billions of dollars. What matters is whether you have any hope at all of collecting. That's why people don't sue the janitor that mopped the floor but forgot to put up the warning signs. They sue the store, the corporation, the board of directors, etc.

Janitor being broke isn't the reason he's not sued.

Why would you sue the worker of the company that made a mistake? You go for the company. You're not personally liable for the mistakes you make at work.

 

[dave_the_nerd]

Janitor being broke isn't the reason he's not sued.

Why would you sue the worker of the company that made a mistake? You go for the company. You're not personally liable for the mistakes you make at work.

Well... that depends on the mistake.

 

[ichy]

So lets say I sue someone that makes only 60K a year and the judge orders them to pay 20 million. They don't have this in any way shape or form. How would they make payments on this. It seems the person would just suffer for the rest of their lives, making payments.... The only way they would leave the debt is die or leave the country?

Jeeebus beat me to it, but people who are hit with massive judgements will usually declare bankruptcy. A 20 million dollar judgement against someone who earns $50k per year is meaningless, that's why it's almost always better to accept an insurance settlement.

 

[zokudu]

Oh I did forget bankruptcy. I'm sorry

 

[JTsyo]

This is called being "Judgment Proof" I believe. http://en.wikipedia.org/wiki/Judgment_proof

Essentially the court and the person suing them can do nothing if the person does not have the money but the person who owes the money is still liable if they ever do receive money or assets in any form. Wage garnishment I believe is only legal in some states meaning if someone is Judgment proof it is not difficult to work the system and stay that way if you have one against you.

EDIT. I was wrong only 3 states do not allow wage garnishment. http://en.wikipedia.org/wiki/Wage_garnishment So if the person is "Judgment Proof" and gets a job you could motion to garnish their wages at the rates listed on that wiki page.

Also as far as the child thing as far as I know children are not liable for any of their parents debt unless they choose to take on the debt. Even if say your parents give you their house upon their death, if it is not paid off it is your choice to receive it. Anything non asset related (other than taxes I believe) is absolved completely unless the child chooses to acquire that debt. Of course creditors have first call on all liquid assets from the estate before the Executor is allowed to deal with the rest of it.

Even those three allow some. The exceptions seem like it would allow the majority of garnishments.

At present three U.S. states — North Carolina, South Carolina and Texas — do not allow wage garnishment at all except for debts related to taxes, child support, federally guaranteed student loans, and court-ordered fines or restitution.

 

[highland145]

Even those three allow some. The exceptions seem like it would allow the majority of garnishments.

Most of those benefit the government. The typical judgement for non payment of debt, in SC, is not garnish-able, unfortunately.

 

[steppinthrax]

How does this affect the person if they need to buy a house, buy a car, get a credit card, if they have this judgement against them and are making the min payments?

Also if the person decides to stop making payments, what can you do from there?

 

[alkemyst]

So lets say I sue someone that makes only 60K a year and the judge orders them to pay 20 million. They don't have this in any way shape or form. How would they make payments on this. It seems the person would just suffer for the rest of their lives, making payments.... The only way they would leave the debt is die or leave the country?

Depends on state...but you could be bankrupted over it or forced into a subpar living level.

There really is no other way around it. If we only penalized people what they could afford, then the penalty would be worth the risk (several paydays versus getting caught once).

 

[MotionMan]

Janitor being broke isn't the reason he's not sued.

Why would you sue the worker of the company that made a mistake? You go for the company. You're not personally liable for the mistakes you make at work.

Orly?



MotionMan, Esq. (<-- Defends employees for mistakes they make at work.)

 

[Ricemarine]

I've been receiving restitution from a bicycle thief that I had bought a stolen bicycle from. My first restitution paycheck was $0.42, and my second one was for $0.02. Needless to say, I probably won't be getting the full amount back in my lifetime.

 

[JTsyo]

I've been receiving restitution from a bicycle thief that I had bought a stolen bicycle from. My first restitution paycheck was $0.42, and my second one was for $0.02. Needless to say, I probably won't be getting the full amount back in my lifetime.

haha would be funny if he's mailing you checks and the stamp is worth more than his payments.

 

[T_Yamamoto]

Short answer: because they can

 

[DrPizza]

Janitor being broke isn't the reason he's not sued.

Why would you sue the worker of the company that made a mistake? You go for the company. You're not personally liable for the mistakes you make at work.

Cool! When I'm driving a work vehicle, I can ignore speed limits, etc. :whiste:

 

[RockinZ28]

Had a friend whos aunt was sued for over 1 million and lost. Think she makes ~$10 payments per month.

 

[marvdmartian]

They have to leave you enough money to live on (they can't make you indigent.....i.e.-dependent on the state to have a place to live, and food to eat). However, they don't have to let you have money for nice things, and can/will garnish your "mad money".

Honestly, do you think that OJ Simpson will EVER pay off the $30million that Nicole Brown's parents won in that civil suit? Especially now, since he's in prison??

 

[Bateluer]

Jeeebus beat me to it, but people who are hit with massive judgements will usually declare bankruptcy. A 20 million dollar judgement against someone who earns $50k per year is meaningless, that's why it's almost always better to accept an insurance settlement.

What about the people targeted by the RIAA/MPAA for copyright infringement? If they don't settle out of court for thousands, they get handed multi-million dollar judgements. That pretty much ruins their live . . . would that be cleared by bankruptcy? Seems like it'd be a pretty awesome move to make the RIAA spend millions of dollars in legal fees to get a million dollar judgement against you only for you to declare bankruptcy and not owe a thing.

 

[alkemyst]

Bankruptcy laws don't work like that. Just like you can't go and purposely rack up $50k in changes and go to the courts and say "NEENER NEENER NEENER!".

 

[0roo0roo]

They have to leave you enough money to live on (they can't make you indigent.....i.e.-dependent on the state to have a place to live, and food to eat). However, they don't have to let you have money for nice things, and can/will garnish your "mad money".

Honestly, do you think that OJ Simpson will EVER pay off the $30million that Nicole Brown's parents won in that civil suit? Especially now, since he's in prison??

you have to be careful with such punishments anyways, the guy might just go f***it, just go on a killing spree and go out with a bang, rather than spend lifetime in poverty working for no gain.

 

[CptObvious]

How does this affect the person if they need to buy a house, buy a car, get a credit card, if they have this judgement against them and are making the min payments?

Also if the person decides to stop making payments, what can you do from there?

Judgments show up on one's credit reports, but unlike credit cards or mortgages there's no record of payments. Needless to say if the judgment is large and the income is small, any lender would be a fool to give that person a loan.

As to enforcing a judgment on a non-payor, the creditor can ask the court to order a sale of the debtor's assets, but there's likely not much there (as the saying goes, "squeezing blood from a turnip"). Most likely the creditor will end up writing the debt off as a loss.