Short answer: maybe. You may be “judgment proof” with respect to most types of unsecured debt (debt without collateral) if you:

• Own no real estate whether in your name or not;
• Income is limited to the category and amount of income that has special protection from creditor claims, such as social security income or VA disability income;
• No future inheritance is possible;
• No tax or domestic support debt (such as child support or alimony);
• Debt was incurred in the state of Texas.

Even if you are theoretically “judgment proof,” aggressive creditors may still be able to get to your money or drive you crazy trying. For example, judgment creditors may attempt to levy your bank account; appoint a receiver or file voluminous post-judgment discovery (questions you have to answer with documents you must produce). Other negative consequences may also arise from a judgment such as “Cancellation of Debt” tax which bankruptcy may exempt you from.

The best scenario is to keep a judgment from being entered against you. For more information on handling lawsuits, read Debt Lawsuit/Judgment Defense.

Each situation is different and it is important to consult with an experienced bankruptcy attorney to determine if filing bankruptcy is best for you.