Can I Sue Someone Who Has No Money?
You can sue anyone. Getting paid is a different question. Here's the honest breakdown of "judgment-proof" debtors, hidden assets, and when the math still works in your favor.
"Someone owes me $1,500 but they're completely broke — no job, no assets, nothing. My friend says suing a broke person is pointless. Is there any point at all or am I just wasting my time and money?"
One of r/personalfinance's most-asked legal questions — with two camps of advice that are both partly right. "They can't collect what you don't have" is true today. What it misses is that judgments don't expire quickly, and people's situations change.
View discussions on RedditYou Can Always Sue. Collection Is the Hard Part.
Nothing in the law prevents you from filing a small claims case against someone with no money. If you win, the court enters a judgment in your favor. That judgment is a legal finding that the defendant owes you money.
The problem: courts don't collect for you. A judgment is a tool — it lets you pursue wages, bank accounts, and property. If the defendant has none of those things, or everything they have is legally protected (exempt), the judgment sits on paper.
A person is judgment-proof when their income and assets are all legally exempt from seizure. This is a temporary state — not a permanent shield. If their situation changes (new job, inheritance, insurance payout), the judgment can be enforced years later.
What Can (and Can't) Be Taken
Federal and state law exempt certain income and property from judgment collection. Here's what's typically protected vs. collectible:
- Social Security benefits (42 U.S.C. § 407)
- SSI and disability payments
- Veterans' benefits
- Unemployment and workers' comp
- Child support and alimony received
- Pension / retirement accounts (ERISA-protected)
- Home equity up to state homestead limit
- One vehicle up to state exemption cap
- Basic household goods and clothing
- Wages above federal garnishment minimum (25% of disposable pay)
- Bank accounts containing non-exempt funds
- Real property above homestead exemption
- Second vehicles and recreational vehicles
- Investment accounts (stocks, brokerage)
- Tax refunds
- Business receivables
- Rental income
Federal law (per the CFPB) requires banks to automatically protect two months of directly deposited Social Security funds from garnishment. But if those funds are mixed with non-exempt money, tracing becomes complicated.
How Exemptions Vary by State
State law controls how much of a debtor's home equity and wages are protected. The variation is dramatic:
| State | Homestead Exemption | Vehicle Exemption | Wage Exemption |
|---|---|---|---|
| Texas | Unlimited | Unlimited (1 vehicle per family member) | 100% of wages exempt |
| Florida | Unlimited (½ acre city / 160 acres rural) | $1,000 | 100% of wages (head of household) |
| California | $300,000–$678,391 (county-adjusted) | $3,325 | 75% of disposable wages |
| New York | $89,975–$179,950 (region-adjusted) | $4,000 | 90% of wages (or 60× minimum wage) |
| Illinois | $15,000 | $2,400 | 85% of gross wages |
| Georgia | $21,500 | $5,000 | 75% of disposable wages |
Sources: TX Prop. Code § 41, FL § 222.11, CA CCP § 704.730, NY CPLR § 5206
How to Find Assets You Don't Know About: The Debtor's Exam
Once you have a judgment, you can request a judgment debtor examination — a court-ordered hearing where the defendant must appear under oath and answer questions about their finances. It's one of the most powerful and underused tools in small claims.
After your judgment is entered, file an "Application for Order of Examination" (California) or the equivalent form in your state. There's a small filing fee — usually $25–$50.
Failure to appear at a debtor's exam can result in a bench warrant for contempt of court. This often motivates defendants to settle rather than face the hearing.
Employer name and address, all bank accounts (include banks they've used in the past year), vehicles, real property, side income, cash on hand, money owed to them by others, PayPal/Venmo balances.
The debtor's exam is under oath. Hiding assets or lying about income is perjury — a criminal charge. Courts take this seriously, which is why many defendants settle rather than appear.
In most states you can subpoena the defendant's bank records to appear at the debtor's exam. This lets you verify what they disclose — or catch discrepancies. Check your state's court website for the subpoena form for financial records.
When Suing a "Broke" Defendant Still Makes Sense
- Their situation is temporary (between jobs, recent grad)
- They have a car, real estate, or other assets you're unsure about
- Insurance may cover them (auto accident, contractor work)
- They're self-employed and income may be hidden
- You need the judgment for a police report or insurance claim
- The judgment will affect their professional license or business
- The statute of limitations is about to expire on your claim
- Their only income is Social Security or disability
- They rent, own no vehicle, have no bank account
- They've filed for bankruptcy recently or are likely to
- The amount is small and your filing cost eats most of it
- They're in another state and enforcement would require extra steps
Car accidents, contractor damage, and landlord disputes often involve insurance. If so, the defendant's personal finances are irrelevant — the insurer pays. Always investigate whether an insurance policy applies before writing off a case as uncollectable.
Judgments Don't Expire Quickly
Even if collection is impossible today, a judgment is enforceable for years — and accrues interest in most states. If the defendant's financial situation changes, you can resume enforcement.
| State | Judgment Enforcement Period | Renewable? |
|---|---|---|
| California | 10 years | Yes — another 10 years (CCP § 683.020) |
| Texas | 10 years | Yes — renewable (CPRC § 34.001) |
| Florida | 20 years | Yes (FL § 55.081) |
| New York | 20 years | Yes (NY CPLR § 211) |
If the defendant ever buys real property, gets a steady job, or receives an inheritance while your judgment is active, you can enforce it at that point. People's financial situations change. A judgment today may pay off in five years.
The One Thing That Can Wipe Your Judgment: Bankruptcy
If the defendant files for bankruptcy, most small claims judgments are discharged — meaning they're legally erased. This is the one scenario where a judgment genuinely goes away.
Exceptions: judgments based on fraud, intentional injury, or certain other misconduct can survive bankruptcy. But most garden-variety small claims (unpaid loans, property damage, contract disputes) are dischargeable.
As a judgment creditor, you'll be listed as a creditor in their bankruptcy case and notified. You can object to discharge in certain circumstances, but this requires filing a motion in bankruptcy court — generally worth pursuing only for larger amounts or fraud claims.
Frequently Asked Questions
What if they're self-employed and claim they have no income?
Can I check public records before suing to see if they own anything?
They transferred assets to a family member to avoid paying — is that allowed?
What if they move to another state after I win?
Can I recover my filing fees if I win?
Related Resources
The full playbook: wage garnishment, bank levies, and property liens step by step.
The defendant's perspective — default judgments, interest, and the motion to vacate window.
The full cost-benefit breakdown including the collection problem nobody warns about.
Know your upfront costs before deciding whether it's worth filing.
Sources
- Social Security Administration — Benefits Protection from Garnishment (42 U.S.C. § 407)
- U.S. Department of Labor — Wage Garnishment (15 U.S.C. § 1673)
- Consumer Financial Protection Bureau — Social Security and VA Benefits Protection
- California CCP § 704.730 — Homestead Exemption
- California CCP § 683.020 — Judgment Enforcement Period
- Texas Property Code § 41 — Homestead Exemption
- Texas CPRC § 34.001 — Judgment Enforcement Period
- Florida § 222.11 — Wage Exemption (Head of Household)
- Florida § 55.081 — Judgment Enforcement Period
- New York CPLR § 5206 — Homestead Exemption
- New York CPLR § 211 — Judgment Enforcement Period
- USA.gov — Debt Collection Rights and Protections
This article is for general informational purposes only and does not constitute legal advice. Exemption amounts and enforcement rules vary by state and change over time. Consult a licensed attorney in your state for advice specific to your situation.