JUDGMENT

court judgment

What is a Judgment?

A judgment is a legal court decision that is entered at the completion of a lawsuit.

Judgments are usually filed when a creditor or collection agency was not successful in collecting a debt and initiated the lawsuit to recover the balance of the money owed.

Like tax liens, judgments can lead to wage garnishments and tax refund garnishments.

Consumers who have dealt with judgments placed on their credit reports know what a devastating experience it can bring and the tremendous negative impact which it has.

Judgments significantly lower credit scores and may also prevent consumers from getting approved for new lines of credit like mortgages or auto loans.

What are the Different Statuses for a Judgment?

  • Unpaid Judgment – The Judgment has an outstanding balance and remains unpaid.
  • Paid Judgment – The Judgment has been paid and there is no outstanding balance.
  • Released/Satisfied Judgment – The Judgment has been paid and the court has processed paperwork to show that the obligation has been removed.
  • Vacated Judgment – The previous judgment has been voided and overturned.
  • Dismissed Judgment – The court dismissed the case entirely.
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Avoid Judgments

You can avoid judgments by paying your obligations promptly.

Whether it’s credit card, auto loan, mortgage, utility bill, etc… it’s important to stay on top of your debts and pay your bills on time.

If you can’t pay on time contact the creditor, explain your situation, and set up an alternate repayment plan.

Don’t ignore your debt.

Past due debt accrues late fees, interest, and if you get a judgment against you, the lender can freeze your bank account, garnish your wages, and even garnish your tax refund.

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credit bureau report

How a Judgment Impacts Your Credit?

As a result of a study by the Consumer Financial Protection Bureau and a lawsuit that found issues with reporting public record information incorrectly, as of 2017 judgments no longer report on consumer credit reports.

But, starting January 1, 2020, at the earliest the credit reporting agencies (Experian, Equifax, and TransUnion) may resume reporting the judgments on credit reports.

Although you may not see judgments reporting right away on January 1st 2020, don’t be surprised if they start to appear a few months later.

Once the credit bureaus commence the reporting, judgments will begin to do substantial damage to credit reports and lowering credit scores as before.

How Long Can a Judgment Report on My Credit?

Whether paid or unpaid, court judgments can report on a consumer’s credit file for a period of up to 7 years from the date the judgment was filed.

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What to Do If You Get a Judgment?

A judgment reporting on your credit reports is going to cause substantial negative issues to your credit scores.

If you get a notice that a creditor is suing you for a debt, contact the plaintiff and see if you can pay off the debt or work out a payment plan to avoid the judgment.

If you can’t come to an agreement, go to court on the date of the case and when your case is called ask that the plaintiff validate your debt in front of the judge.

If the plaintiff doesn’t have the validation documents, which may include a copy of the original signed contract/agreement and statements showing how you accumulated the balance that you are being sued for, the judge may dismiss the case in your favor.

If the plaintiff/creditor can validate the debt you will lose the case and a judgment will be placed against you.

But, when you show up at court at least you give yourself a chance to win.

If you don’t go to court you are going to lose 100% and will have a deficiency judgment placed against you.

If you already have a judgment placed against you, you will want to contact the creditor or their legal representative to work out a payment plan.

Paying off the debt will protect your assets and save you the embarrasment of the creditor contacting your employer to garnish your wages.

 

As far as your credit report goes, you can try disputing court judgments with the credit reporting agencies or requesting for the verification and validation of the trade-line information with LexisNexis and LCI.

 

Just like any other account, you should try to be proactive and work on the derogatory information but, it’s important to understand that the only information that can be removed from a consumer credit report is information that is inaccurate, unverifiable, incomplete, or not in compliance with the law.

CreditFirm.net has helped thousands of clients improve their credit scores and remove judgments from their credit reports.

If you have court judgments on your credit reports contact CreditFirm.net to find out how we can help fix your credit and improve your credit scores.

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