Having a judgment filed against you brings with it a new level of debt collection. Thankfully, there are some things you can do to ease the pain.

A judgment is nothing more than a decision by a court that has been entered into the public record.

In order for that decision to be made, someone must file a lawsuit. You get time to formally Answer (that’s a technical term, which is why it’s capitalized) and fight the lawsuit.

If you don’t fight the lawsuit by filing an Answer or similarly responsive pleading then a default judgment will be entered.

If you do fight and lose the lawsuit, a judgment will be entered.

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That’s the easy stuff. Now onto the nuts and bolts.

Do You Have a Judgment Against You?

You’re not supposed to wake up one day to find a judgment against you. You’re supposed to receive notice of a lawsuit, followed by a period of time during which you can choose to respond to the Complaint.

That said, it’s possible that the creditor filed the lawsuit and either served you incorrectly or not at all. It’s also possible that you got the lawsuit papers and didn’t realize they were more than just more letters from the creditor.

The most common ways you may find out that there are outstanding judgments against you are:

  • letter in the mail or phone call from the collection attorneys;
  • garnishee notice from your payroll department;
  • freeze on your bank account; or
  • routine check of your credit report.

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What Happens When A Judgment Is Entered Against You

When you go past due on a debt, the creditor calls and sends letters in an attempt to convince you to pay.

Eventually, it goes to a collection agency.

When all else fails, the matter is turned over to a lawyer. That lawyer files a lawsuit and gets a judgment against you for the specific purpose of getting you to make payments.

The judgment becomes a matter of public record, and is indexed with the clerk of the court. It shows up on your credit report as well as on any background checks.

The judgment is considered a lien against your property, including any real estate that you have, in the state in which the judgment is filed. In other words, a judgment filed in California has no bearing upon property located in New York unless the creditor takes the California judgment to a New York court and has it filed there as well.

What Can A Judgment Creditor Do?

If a judgment has been issued against you, the creditor can satisfy its judgment by freezing your bank account and taking a portion of your wages. Procedures differ from state to state.

For example, in New York the creditor needs to get in touch with an enforcement officer such as a Marshal or Sheriff. Once that happens, he or she can serve a restraining notice on the bank, or on some other person or business that owes money to the judgment debtor, and eventually take the money. If you are employed, the enforcement officer can garnish (take) a portion of your salary to satisfy the judgment.

In California, however, you aren’t allowed to take any action for 30 days from the date that the clerk mailed the Notice of Entry of Judgment. If you don’t take action to resolve the matter during that time, the creditor can:

  • Get in touch with you;
  • Levy (seize) assets;
  • Examine you in court to locate unknown assets;
  • Suspend your driver’s license if the judgment is for auto accident;
  • Suspend your professional license (example: Contractor’s License); or
  • Place a lien on land, buildings, or residence.

How To Resolve A Judgment Against You

Once the judgment is entered and finalized, you can’t fight it anymore. The creditor has claimed that you owe money, and a court has agreed. That said, here are some options for you to consider:

  • pay the balance due in full;
  • work with the creditor to settle the debt or work out an agreeable payment plan;
  • allow the creditor to seize your assets in payment of the debt;
  • repay the debt involuntarily through a wage garnishee;
  • file for Chapter 7 or Chapter 13 bankruptcy as a means of discharging or repaying the debt (depending on your situation.

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 Which Choice Do You Make?

The judgment creditor can take steps against you to make your life even more difficult.  Having all the information you need about your options makes all the difference.

Whatever you do, don’t just ignore things. That only makes it worse.