Judgment Proof in Florida

A person is considered judgment proof when all of their income and assets are either exempt from creditor collection under Florida law or positioned in a way that makes seizure impractical. The term is not a recognized legal status in Florida. It is shorthand used in the debt collection industry to describe a debtor from whom a creditor cannot realistically collect, even with a valid court judgment.

Being judgment proof does not eliminate the debt or prevent a creditor from obtaining a judgment. It means that the creditor’s legal collection tools have no practical target. The creditor can still record the judgment, and Florida judgments remain enforceable for 20 years. If the debtor’s financial circumstances improve at any point during that period, the creditor can resume collection efforts.

Why the Term Is Misleading

The phrase “judgment proof” implies a permanent shield. In practice, the protection is conditional and often temporary. A debtor who is judgment proof today because their only income is Social Security and they rent their home could lose that status tomorrow by inheriting property, starting a new job, or receiving a legal settlement.

Florida exemptions must also be affirmatively claimed. They do not apply automatically. A debtor who fails to respond to a lawsuit, answer a writ of garnishment, or file a claim of exemption may lose the very protections that made them judgment proof. Courts have entered default judgments and approved garnishments against debtors who assumed their exempt status would protect them without any action on their part.

The more accurate framing is that certain debtors are effectively collection proof at a given point in time, meaning the creditor’s available tools cannot reach any of the debtor’s current assets or income.

Florida Exemptions That Create Judgment Proof Status

Several Florida statutory exemptions, when they apply to all of a debtor’s assets and income, can render a person effectively judgment proof.

Homestead protection. The Florida Constitution protects a debtor’s primary residence from forced sale to satisfy a civil money judgment. The protection is unlimited in value. The only size limitation is half an acre within a municipality or 160 acres in an unincorporated area. Homestead protection does not apply to mortgage liens, property tax liens, construction liens, or certain federal claims.

Head of household earnings. Florida Statute § 222.11 exempts 100% of the earnings of a head of household from garnishment and levy. Earnings include wages, salary, commissions, and bonuses. The debtor must provide more than half the support for a child or other dependent. Passive income such as sole-member LLC distributions does not qualify, even if the debtor pays self-employment tax on the distribution.

Retirement accounts. Florida law protects retirement accounts maintained under specific Internal Revenue Code sections, including 401(a), 401(k), 403(b), traditional IRAs, Roth IRAs, inherited IRAs, SEP-IRAs, and 457(b) plans. Federal law provides additional protection for ERISA-qualified plans.

Social Security and federal benefits. Federal law prohibits creditors from garnishing Social Security income, Social Security Disability Insurance, VA disability benefits, and certain other federal benefit payments. Once deposited into a bank account, these funds generally remain protected as long as they are traceable to the exempt source.

Tenancy by the entireties. Married couples in Florida who hold property as tenants by the entireties enjoy full protection from the debts of either spouse individually. A judgment creditor with a claim against only one spouse cannot reach property held in this form of ownership. The presumption of tenancy by the entireties applies to most property acquired jointly during marriage, but certain assets require specific titling.

A debtor whose only assets fall into these categories and whose only income is exempt has no collection exposure under current Florida law.

Beyond Exemptions: Strategies That Reduce Collection Exposure

Some assets are not exempt under any statute but are structured in a way that makes collection impractical. These strategies do not make a debtor judgment proof in the technical sense, but they achieve a similar practical result.

Multi-member LLCs. In Florida, the exclusive remedy available to a judgment creditor against a debtor’s membership interest in a multi-member LLC is a charging lien. The charging lien attaches only to distributions the LLC makes to the debtor-member. If the LLC does not distribute profits, the creditor receives nothing. The LLC need only have two members, and the ownership split does not need to be equal. An LLC owned 95% by the debtor and 5% by another person qualifies.

Protected bank accounts. A small number of states have enacted laws that restrict or prohibit bank account garnishment. A Florida debtor who maintains accounts in one of these jurisdictions may benefit from additional protection, though the practical effectiveness depends on the specific state statute and the creditor’s willingness to pursue cross-border collection.

Offshore trusts. A properly structured offshore asset protection trust places assets beyond the jurisdictional reach of U.S. courts. Because the trustee is located in a foreign jurisdiction that does not recognize U.S. money judgments, the creditor cannot compel the trustee to turn over trust assets. Offshore trusts are the strongest form of asset protection available but involve meaningful costs and compliance obligations.

What Judgment Proof Does Not Protect Against

Certain obligations override Florida’s exemptions and federal benefit protections.

Federal tax liens can attach to homestead property. The IRS collection authority is not limited by the same exemptions that apply to private creditors. A federal tax lien can reach virtually any asset the debtor owns, including property that would otherwise be exempt from civil judgment creditors.

Child support and alimony obligations are enforceable regardless of the debtor’s exempt status. Federal law permits garnishment of Social Security benefits and other federal payments to satisfy child support and alimony arrears. These obligations survive bankruptcy as well.

Federal student loan collections operate outside the state exemption framework. The Department of Education can garnish wages, offset tax refunds, and reduce Social Security benefits without a court order.

A debtor who is judgment proof against private creditors may still face aggressive collection from these sources.

Settlement Leverage

The practical value of being judgment proof is not legal immunity. It is negotiating leverage.

A creditor evaluating whether to pursue collection against a judgment debtor weighs the cost of collection against the expected recovery. If the debtor’s fact information sheet reveals that all income is exempt and all assets are protected, the creditor faces a choice between spending additional money on discovery and enforcement motions that will yield nothing, or accepting a negotiated settlement at a fraction of the judgment amount.

The strongest negotiating position arises after the creditor has attempted collection and failed. A wage garnishment dissolved by a successful head-of-household claim, a bank levy that captured only exempt Social Security funds, or a charging lien that produces no distributions all demonstrate to the creditor that further collection efforts are likely futile. At that point, a settlement offer from the debtor carries significantly more weight.

Responding to Lawsuits and Collection Efforts

A debtor who believes they are judgment proof should not ignore lawsuits or collection proceedings. Exemptions are affirmative defenses that must be raised by the debtor. A court will not apply them on its own.

If a creditor files a lawsuit, the debtor must file an Answer within 20 days of service asserting any available defenses. If the creditor obtains a judgment and serves a writ of garnishment on the debtor’s bank, the debtor must file a claim of exemption within the deadline specified in the garnishment notice. Missing these deadlines can result in a default judgment or a garnishment order against funds that would otherwise be fully protected.

The term “judgment proof” can create a false sense of security. The protections exist, but they require the debtor to act.