What if I lose to my creditor in court?

If you lose to a creditor in Court then they have obtained a judgment against you.  A judgment means that you legally owe this person or company money and now they can now legally collect against you using the remedies available to them.  A civil judgment is not a criminal matter and you can not go to jail for not paying, or not having the ability to pay.  Once a judgment is entered you become the judgment debtor and the person or company who won becomes the judgment creditor. If a company has a judgment against you it is generally only good for 7 years, however, the company can renew the judgment before it expires if it is not paid.  Technically the judgment creditor can extend the judgment for another 20 years, allowing them 27 years to collect.  This is the law in Illinois only.  If you get sued in another state you lived the laws extending or decreasing the amount of time the judgment is good varies. Usually there are only two ways that a judgment creditor .  That is finding out where you bank and garnishing or levy your bank account.  They could have this information because you told them on the phone where you bank or you have paid them with a check from your bank.  If the judgment creditor garnishes or levies your bank account they essentially tell the bank to release all the money in that bank account to them.  The bank will normally comply absent certain exceptions.  This could be if the bank account is listed in a business name or the account has multiple parties listed on there.  The bank does not want to release money that may belong to someone else.  Certain other retirement accounts may be exempt but you would have to check the specific rules and laws for your state as well as the banks policies and procedures. The second, and more common way, is the judgment creditor garnishes a percentage of your wages from your employer.  This generally only applies to w-2 employees, not independent contractors who receive 1099s.  The judgment creditor would find out where you work because you told them, had listed it on your loan application when you applied for the financing or they obtained a copy of your credit report and it is listed on there.  Getting the judgment creditor to cease your wage garnishment is extremely difficult.  The best way is to reach a payment or settlement agreement to pay off the funds or to file bankruptcy (a tactic I do not recommend unless absolutely needed). There are other ways a judgment creditor may attempt to collect and they are not as common as previously mentioned.  Usually it involves place a lien on your property (ie car, house) in hope that you pay off the amount so the judgment creditor will release the lien on your property.  This tactic of liens is not as effective and utilized as much because they will have to find and sell the asset in order to collect.  Often times this is difficult and the amount received from the sale is nominal.  Certain assets, for personal or homestead use, are also exempt and the judgment creditor can never touch. For example, your social security benefits can never be garnished.  However, if you deposit those funds into a bank account (and leave them there) the judgment creditor could issue a bank levy and garnish those wages.  If you have a judgment you could also attempt to work out a payment plan with the judgment creditor.  This is the best option before they start going after your assets.  However, if you do not have a job, own a bank account and have little to no property then you are judgment proof.  This means they do not have any money they could ever collect from you.  An example of this is someone who lives of their retirement from social security and a pension and rents with no bank account.