when a person is judgment proof creditors are unable to collect any money they are owed this status is considered temporary until the individual is able to earn an income large enough to start paying off their debts assuming they ever do 
most lawyers advise debtors not to respond to debt collectors if they believe they are judgment proof unless they are sued in that case they should answer the lawsuit and tell the court that they are judgment proof the legal aid society of new york city offers this additional warning be careful a company or their attorney can and may try to get you to voluntarily agree to enter an agreement also known as a stipulation of settlement payment plan or settlement agreement to pay an alleged debt if all your income is judgment proof you do not have to make or agree to a settlement payment plan or other types of agreement because all your income is supposed to be protected by law 2being judgment proof is not permanent judgments can be valid for many years and creditors can continue to try to collect what the judgment allows long after they win a lawsuit against a delinquent borrower judgments can also remain on the individual s credit report for many years even beyond the time limit for normal debts judgment proof is also referred to as collection proof that may be a more apt name as it doesn t protect the person from judgments against them but instead prevents creditors from collecting what they are owed state laws determine the amount of wages and the specific assets that cannot be collected from a debtor despite a court judgment against them example of judgment proofsuppose a person let s call them charlie becomes too sick to work and uses a credit card to pay their living expenses and medical bills for a year they recover from their illness and go back to work but they can t afford to repay the debt they accumulated the credit card company fails in its debt collection efforts and then sells charlie s unpaid debt to a collection agency the collection agency contacts charlie repeatedly but they don t pay them anything they re struggling to hang onto their house buy groceries and keep the lights on as a last resort the collection agency sues charlie and obtains a judgment against them for the unpaid debt the agency now has a court order requiring charlie to repay a sum the court has determined to be valid however because charlie barely earns more than the minimum wage their wages can t be garnished and because they live in a state that protects their primary residence from creditors the collection agency can t place a lien on their house charlie has no money in the bank and they don t own a car or any other assets that can be seized and sold to repay their debt in some states they could keep one car charlie is currently judgment proof if charlie s financial circumstances improve next year and they start earning significantly more the collection agency might then be able to garnish a percentage of their wage to start recouping what they owe because judgments can remain valid for a long time and be renewed once they expire creditors may be able to collect on charlie s debt many years down the road can you declare bankruptcy if you re judgment proof you can file for bankruptcy if you re judgment proof but there is little reason to do so if most of your assets are already off limits to debt collectors or you don t have any assets to speak of however if your financial situation improves to the extent that you re no longer judgment proof and you do have assets you want to protect bankruptcy could become an option worth exploring with a knowledgeable lawyer bankruptcy also has the advantage of finality while a judgment can hang over your head for many years bankruptcy however can have a significant negative impact on your credit score a debt relief company or credit counseling service could be a better option in the long term while this may still damage your credit it won t be as bad compared to declaring bankruptcy 