Judgment Proof Credit Repair And You
What is Judgment Proof?
Judgment proof is a term used to describe a person who has insufficient assets or income to satisfy a legal judgment against them. If a creditor sues a judgment proof individual for an unpaid debt, the individual is considered “judgment proof” because they do not have any assets or income that can be seized or garnished to satisfy the debt.
What is Credit Repair?
Credit repair is the process of improving a person’s credit score by removing negative information from their credit report. Negative information can include late payments, charge-offs, and collections. Credit repair also involves establishing positive credit history by paying bills on time, maintaining low credit card balances, and avoiding new debts.
How do Judgment Proof and Credit Repair relate?
Being judgment proof means that your creditors cannot take any legal action against you to collect their debt, but it does not mean that you are free from the burden of debt. Your unpaid debts will still be reported to credit bureaus and will negatively affect your credit score. This is where credit repair comes in.
If you are judgment proof, you still have the option to repair your credit by following the same steps as someone who is not judgment proof. This includes disputing inaccurate information on your credit report, establishing positive credit history, and avoiding new debts.
Benefits of Credit Repair for Judgment Proof Individuals
- Improving your credit score will make it easier for you to obtain credit in the future if you ever become solvent and able to pay your debts.
- Having a better credit score can also lower your insurance premiums.
- Landlords and employers often check credit reports, so having a better credit score can increase your chances of being approved for a rental or a job.
- If you ever inherit money or win the lottery, your unpaid debts may come back to haunt you. Improving your credit score will make it easier for you to negotiate a settlement or to pay off your debts in full if you choose to do so.
Beware of Credit Repair Scams
Unfortunately, the credit repair industry is full of scams and shady operators. Be wary of any company that promises to remove accurate negative information from your credit report, charges upfront fees, or advises you to dispute all negative information on your credit report regardless of its accuracy.
The best way to repair your credit is to do it yourself. The Federal Trade Commission offers a free guide on how to dispute errors on your credit report.
Just because you are judgment proof does not mean that you should ignore your credit score. Repairing your credit can have many benefits, even if you have no assets to lose. Be cautious of credit repair scams and take control of your credit by improving your credit score through responsible financial management.