What to do about an uncollected judgement?
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What to do about an uncollected judgement?
About 3 years ago, I had a judgement awarded to me for $7500, plus court costs and fees for money loaned to an ex-boyfriend. I still have not recieved any money paid toward it from him. I attend court in a couple days to get an execution to have his wages garmished, as I recently found put where he works. If for any reason I am not able to collect funds from his job, can I claim the unpaid judgement on my taxes for next year?
Asked on October 27, 2012 under Bankruptcy Law, Rhode Island
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
No, unfortunately, there is no tax benefit to an unclaimed judgment if you're the one who obtained the judgment. It's not considered equivalent to an asset or investment losing value or becoming worthless; it's more like not being able to get a raise or work overtime, so while you don't have to pay taxes on money you did not receive, you do not get any tax benefit from having received it. If you paid for (bought) someone else's judgment and that investment then became valueless, in that case, you might be able to get a tax advantage.
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