Judgment-Proof Cease & Desist Letter Template

What Does It Mean to Be Judgment-Proof?

If you live on a fixed income, you may be judgment-proof. Being judgment-proof means creditors or debt collectors can't collect anything from you, even if they sue you for credit card debt or medical bills and win. This is because you don’t have any income or assets they can legally take. 

If you're judgment-proof, it’s unlikely that creditors will go after you in court, but there’s no guarantee. Some creditors might still try to sue, but collecting anything from you will be extremely difficult or impossible.

How To Know if You’re Judgment-Proof

You're usually considered judgment-proof if any of the following apply:

• All your income is protected by law (certain income sources are exempt under federal law, and states may provide additional protections)

• You don’t have a bank account with savings in it

• You don’t own a home with equity

• Your assets are protected by state or federal rules (often called exemptions laws)

For example, many sources of income are exempt from wage garnishment. Specifically, income from Social Security, Supplemental Social Security, unemployment, child support, alimony, and VA benefits can’t be garnished. 

If you don’t have non-exempt cash or real estate, creditors won’t have anything to take or freeze, and they can't place a lien on your property. States also protect certain assets like personal belongings up to a certain amount, which adds another layer of protection even if a creditor wins a lawsuit.

Are There Exceptions to Judgment-Proof Exemptions?

Yes. Being judgment-proof means creditors can’t collect on most debts because you don't have income or assets they can legally take. But there are important exceptions to this rule.

If you owe child support, alimony, federal student loans, or back taxes, being judgment-proof won’t protect you from these debts. The government has special collection powers for these types of obligations, and they can enforce payment no matter your financial situation.

For example, the government can garnish (take money directly from) your Social Security or Social Security Disability Insurance (SSDI) payments to cover unpaid child support, alimony, or back taxes. They can also seize your tax refunds to pay down these debts.

Because of this, it’s really important to stay current on payments for child support and alimony, as failing to do so can have serious consequences. If you're struggling, consider talking to a lawyer about your options or look into adjusting the payment amounts through the courts.

What Is a Cease & Desist Letter?

A cease and desist letter is a formal request to a collection agency asking them to stop contacting you about a specific debt. Under the Fair Debt Collection Practices Act (FDCPA), once a debt collector receives this letter, they’re legally required to stop communicating with you, except for one final notice. This last communication can let you know if they plan to take legal action. 

Keep in mind, sending a cease and desist letter doesn’t erase the debt — it just stops the communication.

If you’re judgment-proof, a cease and desist letter can be especially helpful. It can stop the harassment while your financial situation stays the same. Creditors can still sue you after getting the letter, but they might be less likely to if they know they won’t be able to collect anything from you. Just remember that even though the communication stops, the debt still exists, and there could still be legal risks.

When Should You Use a Judgment-Proof Letter?

If you're confident that you're judgment-proof and want to stop debt collectors from contacting you, sending a cease and desist letter can be an effective way to get them to stop. People often use this letter to push creditors to back off from aggressive collection efforts or to discourage potential lawsuits. 

However, it's important to note that sending a cease and desist letter does not guarantee protection from a lawsuit. Even if you're judgment-proof, a creditor or debt collector may still decide to sue, though they may be unable to collect anything if they win.

Judgment-Proof Cease & Desist Letter Template

You can find sample letters online, including this useful downloadable letter from the District of Columbia attorney general. Below is a free template you can use and adapt to let a debt collector know you are collection proof.

[Your Name]

[Your Address]

[Date]

[Debt Collector’s Name] 

[Debt Collector’s Address]

Re: [Account number for the debt, if you have it]

To Whom It May Concern:

I am formally requesting that you cease all communication with me, as permitted under my rights outlined in the Fair Debt Collection Practices Act (FDCPA).

Please take note that my income is legally protected from any form of garnishment, attachment, levy, or seizure. This is because my income comes from the following exempt sources:

• Social Security (SSI, SSDI)

• Public Assistance (TANF)

• Unemployment Compensation

• Disability Benefits

• Workers' Compensation

• Veterans Benefits

• Pensions (public and private)

• Alimony or support that is reasonably necessary for the support of me or my dependents

I request that you cease all written and verbal communication with me. I’m aware that if you continue to contact me after receiving this letter, it’s considered harassment and violates my rights under the FDCPA. This letter is not meant in any way to be an acknowledgment that I owe this money. Thank you for your cooperation.

Sincerely,

[Your Name and Signature]

Judgment-Proof and Cease & Desist Letters FAQs

Here are some answers to frequently asked questions about judgment-proof cease and desist letters.

Do You Need To Hire a Lawyer To Help?

No. You can draft and send a cease and desist letter declaring your judgment-proof status on your own. If you do get sued and want legal advice, you can contact a lawyer or legal aid society.

Do You Need To Send the Letter by Mail?

Yes. It’s important to send your cease and desist letter by mail, and it’s preferable to send it using certified mail so you can track delivery. It’s also a good idea to print two copies and keep one for your records.

What Happens After You Send a Cease & Desist Letter?

By law, the debt collector should stop contacting you after you send a cease and desist letter. If they continue to contact you for repayment or to try to collect on the debt, they may be violating your rights under the FDCPA. If a debt collector has violated your rights or is harassing you, you may be able to sue them to collect damages.

How Does a Cease & Desist Letter Affect Your Credit?

Sending a cease and desist letter shouldn’t affect your credit score or appear on your credit report. It’s simply a communication between you and the creditor or debt collector. 

Let’s Summarize…

Being judgment-proof means that even if a creditor wins a lawsuit against you, they won’t be able to collect money from you because your income and assets are protected by law. This typically applies to people whose income comes from sources like Social Security, unemployment benefits, or other government aid that creditors can’t touch. It also applies if you don’t have any significant assets or equity in property that creditors could claim.

If you’re judgment-proof and want to stop debt collectors from harassing you, you can send them a cease and desist letter. This letter legally requires them to stop contacting you. Keep in mind, though, that while this stops the communication, it doesn’t erase the debt or prevent a creditor from taking legal action against you. They could still sue you, but since your assets and income are protected, they wouldn’t be able to collect on the judgment.