In many cases, individuals experience insolvency before
they file for bankruptcy. This means that they do not have the necessary assets
to pay their creditors for the debs that they owe. Even if creditors take legal
action against an insolvent party, their efforts would be futile because the
defendant would not have the necessary assets to compensate their creditors.
An individual who is insolvent is deemed to be
“judgment proof” because, even if a judgment is made, the defendant
will not have the necessary resources to fulfill the conditions of the
judgment. In general, an individual who is considered to be judgment proof has
very few assets to their name and the property that they do posses is either
worth very little, or it is exempt property.
