What Is a Judgment on a Credit Report?

By Joyce Starr

  • Overview

    When a person you owe a debt to takes you to court and you lose the case, a judgment is filed against you for the amount you owe. Anyone who then pulls up your credit report will be able to see you have a judgment. Judgments can happen to anyone and for many reasons, but it's best to avoid one.
  • Options of the Creditor

    When you owe money to a creditor and don't pay, the creditor has several options to try to recoup the money. It has the option of taking you to court. The creditor is basically asking the court to file a judgment against you for the monies owed. Only if you lose the court case will a judgment be filed and affect your credit report. The other options a creditor has is to either write off the debt or send it to a collection agency to try to recoup some of the money.
  • What Happens When You're Served?

    When the unpaid debt has been sent to collections and you don't respond, the collector may serve you with court papers. When this happens, you have 30 days to respond and object to the debt if you believe you do not owe it. If you are able to prove that the debt is not valid, the court will dismiss the case. If you are not given the legal 30 days' notice to respond, the creditor has violated the Fair Dept Collections Practice Act and the case can also be dismissed. If you know that the debt is valid, it's best to contact the creditor as soon as possible to try to work something out so a judgment won't be filed against you.

  • How Long Does a Judgment Affect Credit?

    A judgment is a serious smudge on your credit report that can hang with you for a long time. A judgment can stay on your credit report from 12 to 20 years. The creditor has the option to renew the judgment, too. As the old judgment reaches its expiration date, the creditor may file a new motion to renew it. In other words, the judgment could be on your credit report for the rest of your life. Even if you pay the judgment and the debt is now listed as satisfied, it can remain on your credit report for 7 years. Each state has its own statute of limitations concerning debts. It's best to familiarize yourself with your particular state's statute if you receive court papers of a judgment being filed against you. If this debt has reached the statute of limitations, the creditor is not legally able to file suit against you for the money owed. The case would then be dismissed. However, if you do not show up in court, a judgment can be filed against you because you were not there to enforce the statute of limitations on the debt.
  • How to Remove it From the Credit Report

    If the statute of limitations has expired on your debt, you can contact the credit bureaus and dispute the debt to have it removed. The credit bureau has 30 days to find out whether the debt is valid or not. If the court does not respond within this time, the debt will be erased. You may never have to contact anyone else regarding the debt other than the credit bureau. Once a judgment has been filed, you are still able to negotiate with the creditor to dismiss the judgment in exchange for a payment of money owed on it. Any agreements reached between you and the creditor must be in writing. You will need proof if, for some reason, the judgment is not removed. This will leave a better rating on your credit report than if the report just shows the judgment paid. It can take 30 to 45 days for your credit report to reflect a new rating. You can also used a procedure called "motion to vacate." This is generally used if you feel you were wrongly sued or improperly served. If you get the judgment vacated, it's removed entirely from your credit report. When using this procedure, it's probably best to spend a couple hundred dollars and hire an attorney who specializes in these types of cases.
  • Never Let the Judgment Happen

    If you are served court papers that a creditor is filing a judgment against you, don't ignore it. If you know that the debt is valid, do everything possible to work out some sort of agreement with the creditor. If the statute of limitations hasn't run out on the debt, it's best to try to settle it out of court before you get a judgment listed on your credit report. Most creditors will be more than willing to work out some type of repayment plan with you. If you ignore the court case, the creditor may be able to levy your wages or put liens against your assets, such as your house.
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