Impeachment is the process of demonstrating that a witnesses' testimony was inaccurate. You can do this by introducing other evidence that contradicts their testimony. You can also do this by showing that they're a dishonest person in general, but the ways in which you're allowed to do this are VERY limited. You're not allowed, in general, to impeach with "collateral matters" - i.e., proof that they were dishonest in some totally unrelated context. You can introduce evidence that they were convicted of a crime, to impeach them, but only if it was in the past 15 years, and only if it was a felony or a crime of dishonesty such as perjury or forgery.
An impeached witness still gives testimony and the court still considers that evidence; they're just supposed to consider the impeachment as possibly reducing the persuasiveness of that testimony.
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I agree with Mr. Bodzin's answer. I'd add that you can also impeach a witness by showing that they are biased or have some incentive not to tell the truth. For example, if they have received money or a reduced sentence for their testimony or if they have something to gain from the outcome of the case.
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Even if someone is impeached, they can still be a witness. Impeachment just means showing something about the witness that suggests their testimony is wrong.
You could impeach a witness by showing that they are a dishonest crook, for example.
Or you could impeach a witness by showing that they are somehow biased (for example, if they are the grandmother of one of the parties to the case).
Or you could impeach a witness by showing that they could not have observed what they claim to have observed (for example, if there is a man who claims to have seen the bank robber's face, you could impeach him by showing that they have horrible vision and were not wearing their glasses).
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