If you can’t pay a civil lawsuit judgment, the court order stays in force and the person who won it (the judgment creditor) can use legal collection tools to go after your paycheck, bank accounts, and property. What they can actually collect depends on what you have and what the law protects. If your income and assets are all shielded by exemption laws, you may be “judgment proof,” meaning collection isn’t practical even though the debt still exists. You also have options: negotiating a reduced payoff, asking the court for a payment schedule, or filing for bankruptcy.
Doing nothing is the one choice that reliably makes things worse. Judgments accrue interest, last for decades in most states, and can usually be renewed when they expire. Federal judgment liens, for example, last 20 years and can be renewed for another 20.1Office of the Law Revision Counsel. 28 USC 3201 – Judgment Liens A creditor who is patient can wait you out.
What the Creditor Can Actually Take
Before touching anything, the creditor usually needs to find out what you have. They can ask the court to order you to appear for a debtor’s examination, where you answer questions under oath about your income, bank accounts, real estate, vehicles, and other property, and often produce documents like tax returns and account statements. Skipping that hearing is treated as contempt and can lead to fines or a warrant for your arrest. Once the creditor has the roadmap, they can use any of the collection tools below.
Wage Garnishment
Garnishment is the most common tool. The creditor gets a court order directing your employer to withhold part of your paycheck and send it to the creditor. Federal law caps the amount at the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage of $7.25 per hour.2Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment Disposable earnings means what’s left after legally required deductions like taxes and Social Security. If you earn near minimum wage, that formula can reduce the garnishable amount to very little, or even zero.
Child support and alimony have higher ceilings: up to 50% of disposable earnings if you’re supporting another spouse or child, 60% if you aren’t, and an extra 5% when payments are more than 12 weeks overdue. Federal law also bars your employer from firing you because your wages are being garnished for a single debt.3U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act
Bank Account Levies
A bank levy freezes the funds in your checking or savings account and, after a waiting period, transfers them to the creditor. Unlike garnishment, which takes a slice of ongoing pay, a levy can empty an account in a single sweep. If the judgment isn’t fully paid, the creditor can come back and levy again when new money comes in.
Property Liens
When a judgment is recorded with the appropriate county office, it attaches as a lien to real estate you own. You usually won’t be forced out of your home, but you can’t sell or refinance without paying off the judgment first. In some cases a creditor with a lien can force a sale, though for an ordinary civil judgment that is uncommon and depends heavily on your state’s homestead rules.
Interest Keeps Running
Whatever the creditor collects, the balance keeps growing until it’s paid. Judgments accrue post-judgment interest from the day they’re entered. Federal judgments use a rate tied to the one-year Treasury yield;4Office of the Law Revision Counsel. 28 USC 1961 – Interest state courts set their own, which vary. On a large judgment, even a modest rate adds thousands over the years.
What Creditors Cannot Touch
Exemption laws exist so that losing a lawsuit doesn’t leave you homeless. The details vary by state, but the broad categories hold up almost everywhere.
Home Equity
The homestead exemption shields some or all of the equity in your primary residence. Protected amounts range from a few thousand dollars in some states to unlimited protection in a handful of others.5Legal Information Institute. Homestead Exemption If your equity is above the exemption, a creditor could in theory force a sale, pay you the exempt share, and take the rest. In practice this rarely happens unless there’s substantial equity above the threshold.
Household Goods and a Vehicle
Most states exempt essential household goods, clothing, and the tools you need for your job. A set dollar value of one vehicle is usually protected as well. These exemptions aren’t about keeping luxuries. They’re about making sure you can keep living and keep earning.
Retirement Accounts
ERISA-qualified retirement plans, including 401(k)s and pensions, have strong federal protection. The law bars plan benefits from being assigned or taken by creditors,6Office of the Law Revision Counsel. 29 USC 1056 – Form and Payment of Benefits and that protection applies both inside and outside bankruptcy.
IRAs don’t have the same blanket ERISA shield, but they do get significant protection in bankruptcy. Federal law exempts IRA funds up to $1,711,975 (as adjusted for 2025–2028), and amounts rolled over from an employer plan don’t count toward that cap.7Office of the Law Revision Counsel. 11 USC 522 – Exemptions Outside bankruptcy, IRA protection varies by state.
Government Benefits
Social Security payments can’t be subject to execution, levy, attachment, or garnishment by most creditors.8Social Security Administration. SSR 73-22 – Section 207 of the Social Security Act There are exceptions for child support, alimony, federal tax debts, and certain other government debts.9Social Security Administration. Can My Social Security Benefits Be Garnished or Levied? Veterans’ benefits, federal student aid, and other federal benefit payments get similar protection.10Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits, Like Social Security or VA Payments
When Everything You Have Is Protected: “Judgment Proof”
If your only income comes from exempt sources like Social Security, your home equity is within the homestead exemption, your bank accounts hold only protected benefit deposits, and you own no valuable non-exempt property, you’re effectively judgment proof. The term means enforcing the judgment isn’t feasible because there’s nothing the creditor can legally take.11Legal Information Institute. Judgment-Proof
Being judgment proof doesn’t erase the debt. The creditor still has the legal right to collect and interest keeps running. If your situation changes — you get a job, inherit money, buy property — collection can start up again. For people on fixed government income with few assets, though, creditors often back off because the cost of chasing isn’t worth the return.
Your Options When You Can’t Pay
Negotiate Directly With the Creditor
Creditors who won a judgment know collecting is slow and expensive. Many will accept a lump sum for less than the full balance, especially if the alternative is years of chasing someone with little to take. If a lump sum is out of reach, a structured payment plan sometimes works instead. Get any agreement in writing, and make sure it includes language confirming the judgment will be marked satisfied once you finish paying.
Ask the Court for a Payment Schedule
In some jurisdictions, the court can set a payment schedule based on what you can actually afford, rather than letting the creditor take everything available at once. This works best when you can show limited income and assets. It doesn’t reduce what you owe, but it gives you predictability and can head off the more disruptive tools like bank levies.
Bankruptcy
Bankruptcy can discharge many civil judgment debts and give you a genuine fresh start, but it’s a serious step. The two main consumer options work differently.
Chapter 7 is a liquidation. A trustee sells your non-exempt assets, pays creditors, and most remaining debts are wiped out. The process generally takes about four months from filing to discharge.12United States Courts. Chapter 7 – Bankruptcy Basics You must pass a means test comparing your income to the median in your state; if you earn too much, you’ll be directed to Chapter 13.
Chapter 13 lets you keep your property while repaying debts through a court-approved plan lasting three to five years.13United States Courts. Discharge in Bankruptcy – Bankruptcy Basics You need regular income to qualify, and you’ll pay some portion of what you owe based on your disposable income. When the plan is complete, remaining eligible debts are discharged.
Chapter 7 stays on your credit history for 10 years; Chapter 13 stays for seven. Bankruptcy also requires mandatory credit counseling and involves court fees along with, realistically, attorney fees.
Judgments That Survive Bankruptcy
Not every civil judgment can be discharged. Federal law carves out categories of debts that survive regardless of your finances:14Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
- Debts arising from false representations, actual fraud, or fraudulent financial statements.
- Debts from willful and malicious injury to another person or their property.
- Civil judgments for death or personal injury caused by driving while intoxicated — non-dischargeable in both Chapter 7 and Chapter 13.
- Debts for embezzlement, larceny, or fraud committed while acting in a fiduciary role.
- Child support and alimony obligations.
If your judgment falls into one of these, bankruptcy won’t erase that specific debt, though it may still clear your other debts and free up resources. What matters is the underlying conduct, not just the dollar amount.
Why Doing Nothing Makes It Worse
Ignoring a judgment is the worst option on the table. Interest keeps accruing. The creditor can garnish wages, freeze bank accounts, and record liens without asking you again, because the court order already exists. Skip a debtor’s examination and you can be held in contempt, which can mean fines or jail time.
And the clock is long. Most states allow enforcement for 10 to 20 years, with renewal available in many places, so a determined creditor can keep a judgment alive for 20 years or more. If your circumstances improve during that window, they can step back in. Addressing the situation now — even if all you can do today is document that you’re judgment proof — puts you in a stronger position than hoping the judgment goes away on its own.