You can't answer the lawsuit that you are "judgment proof." That won't stop the judgment, it just indicates that you have no means to satisfy it.
As for your house, they will only get a junior lien on the property which just means they are in line to get their money if the house is sold (or foreclosed upon). The lien is only good for ten years (and not renewable). The homestead exemption protects $59,000 (or so it scales up periodically) of from the judgment creditor(s). It really doesn't end up meaning anything to you unless you end up in bankrutpcy.

