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Here's a situation related to a story that's been in the news lately. I have no experience with any legal situations, so apologies for using incorrect terms/vocab.

Conditions: The person being sued is already in jail for life, they will not be able to pay the amount owed through future work, they do not have enough assets to liquidate/transfer (however its done) to pay off the amount.

How does the party that makes the lawsuit get the money in this scenario? If the person cannot pay it off, does it transfer over to their relatives?

  • What jurisdiction? What type of debt? In Norway, the government usually pays the victim the restitution for a violent crime, if criminal that owes the restitution is unable to pay. The government then tries to recover the money from the criminal (usually with little success). This only covers restitution debt and I doubt that this applies in many other jurisdictions. – Free Radical May 18 '18 at 5:37
  • This is specifically referring to a situation in the United States, and as far as I could tell it is classified as restitutional debt. – Nafana May 18 '18 at 6:01
  • FWIW, in the U.S. it is extremely rare for the government to compensate crime victims for the harm that they suffered. (The only exception I can think of is that Colorado has a program funded with interest earned on trust accounts that compensates some victims of theft from a lawyer's trust account by the lawyer.) – ohwilleke May 18 '18 at 15:24
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In the US it's very simple:

How does the party that makes the lawsuit get the money in this scenario?

They don't.

Winning a lawsuit against a person is a legal confirmation that they really do owe you the money. It also gives you the ability to do certain things to try to collect: you could seize their assets or garnish their wages. If they don't have any assets or any income then you are out of luck. You can't take what doesn't exist. As the saying goes, "you can't squeeze blood from a turnip".

A bit of legal jargon sometimes used here is to say that such a defendant is judgment proof. Even if you win a lawsuit against them, it won't do you any good, because they just don't have any money.

If the person cannot pay it off, does it transfer over to their relatives?

No. People are not responsible for the debts of their relatives.

  • Whilst I agree with this, the only amendment I'd make is that if someone else was involved in the contract related to owing the money in the first place (such as a friend or family member signing as a guarantor to a loan), they can also be forced to pay any remaining balances as well. But that only applies if they signed to accept that responsibility. – Horkrine May 18 '18 at 12:21
  • @Horkrine, that's in the situation fo a loan though. I doubt the court makes someone co-sign in a legal case but I don't know. – ggiaquin16 May 18 '18 at 22:49
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There's a difference between "unable to pay off the debt" and "unable to pay anything". A jailed criminal probably won't be able to pay $1,000,000 just because a jury says he should, any more than he will be able to serve 200 years in jail just because that was the sentence. But he will be able to serve some of the time, and he may be able to pay some of the debt. As Nate says, a creditor can garnish income or seize assets or debts owed to the criminal by others. Or he can probably force a bankruptcy, in which all the debtor's assets are administered by a trustee for the benefit of creditors; since the debtor's room and board are covered by the state for the foreseeable future, anything he has may be liable to be liquidated and paid out. Whether any of these options will actually bring in more than they will cost is a decision the creditor has to make.

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