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Help! A Creditor Has a Judgment Against Me!

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In a Nutshell

If you have outstanding debt, it could lead the creditor to sue you and if the lawsuit results in a judgment, they become a judgment creditor. In that case, you become a judgment debtor. But what exactly is a judgment and what does that mean for you? The purpose of this article is to answer that question. We’ll also provide an overview of civil judgments and collection efforts, especially those arising from debt collection litigation.

Written by Attorney Curtis Lee.  
Updated July 20, 2021


If you have outstanding debt, it could lead the creditor to sue you and if the lawsuit results in a judgment, they become a judgment creditor. In that case, you become a judgment debtor. But what exactly is a judgment and what does that mean for you? The purpose of this article is to answer that question. We’ll also provide an overview of civil judgments and collection efforts, especially those arising from debt collection litigation.

Ways A Creditor Can Get A Judgment Against You 

A judgment is a type of court order that officially decides a court case. Judgments exist in criminal and civil matters. However, debt collection lawsuits will involve money judgments. There are four major ways a creditor or collection agency can obtain a money judgment against a defendant.

1. Default Judgment

A default judgment occurs if you don’t properly respond to the lawsuit. A default judgment may occur if you:

  • Don’t file an answer to the plaintiff’s (the person bringing the suit) complaint (or don’t file an answer within the allowed time)

  • Don’t respond to the plaintiff’s summons—the formal legal notice telling you that you’re the defendant in a lawsuit

The basic premise of a default judgment is that you lose the case because you’ve decided to ignore the plaintiff’s lawsuit. This means the plaintiff wins the case even if you have a legitimate defense to their allegations. In other words, because you gave up, the court rules that you lose.

Depending on your reason for not responding to the plaintiff’s lawsuit, you can sometimes set aside the default judgment. To get a judge to agree to set aside the default judgment, you must make the request within a certain period of time. Your state’s laws will determine how much time you have, but it’s often around 30 days.

Assuming your request is made on time, you will also need a good reason for setting aside the default judgment. Common reasons can include never receiving notice of the lawsuit or being unable to appear in court due to no fault of your own. Even if you have one of these reasons, there’s no guarantee a court will agree to set aside the civil judgment. That’s why it’s so important to prevent a default judgment from occurring in the first place.

2. Failure To Comply With Discovery Requests

Discovery is the phase in litigation where each party will request information from the other side. They’re looking for information that could serve as evidence at trial. Parties often bicker about discovery, especially as a way of giving their legal opponents a hard time. As a result, entering judgment for failing to provide discovery is an extreme punishment and is rare. 

If the defendant ignores the discovery requests from the plaintiff, the plaintiff will file various, discovery-related motions with the court. Only when the defendant ignores these repeated attempts will a court enter judgment against the defendant. 

A judge will often use other sanctions before granting a judgment for failing to cooperate with a discovery request. These could include monetary penalties or limits on certain legal arguments that the offending party may use at trial.

3. Summary Judgment

After each side has completed discovery, either side may file a motion for summary judgment, which asks the court to decide a case because going to trial is unnecessary. A court may grant a motion for summary judgment if there’s “no genuine issue of material fact.” In plain English, that means both sides agree on the relevant facts of the case and as a result, the judge can decide the case without having a trial. If a court grants the plaintiff’s motion for summary judgment, it has the same effect as if there had been a trial and a jury found in the plaintiff’s favor.

4. Trial Verdict

If your case goes to trial, either the judge or the jury will reach a verdict. If they reach a verdict in the plaintiff’s favor, the plaintiff will ask the court to enter judgment against the losing party. This is where the verdict becomes official. It gets filed in public records and the judge makes adjustments to the verdict, if necessary. These might include lowering the verdict monetary award if there are special legal caps on what the plaintiff can recover. It might also increase the award by adding interest, filing fees, or other court costs.

What Can A Plaintiff Do If They Have A Judgment Against You? 

After a civil judgment gets entered against you, you must pay the full amount as set out in the judgment. But this satisfaction of judgment is easier said than done. Depending on your state, you might have the option of entering into a post-judgment settlement agreement. This is a type of payment plan where you agree to make regular payments to the plaintiff for a certain period of time. In return, the plaintiff promises not to execute the judgment.

Execution of the judgment (sometimes known as a writ of execution) makes it possible for the plaintiff to begin post-judgment collection actions against the judgment debtor. These collection actions may include:

  • Wage garnishment: Wage garnishment occurs when a debt collector notifies an employer about a legal judgment. The employer must then deduct a percentage of the employee’s paycheck each pay period and send that money to the creditor.

  • Bank account levy: This allows a judgment creditor to freeze someone’s bank account. The creditor will then withdraw money from the bank account to pay off the judgment.

  • Seizure of other assets: A creditor may use a court judgment to seize a judgment debtor’s other assets, including real estate, personal property, or motor vehicles. But even with the help of a judgment, a creditor can’t take just anything. Certain types of property are off-limits, or exempt, from seizure. We’ll touch on these limitations below.

  • Judgment lien: A lien is a legal right that grants a creditor a secured interest in a particular asset (such as real property, like your home). Judgment liens get recorded in the county records office. They serve as public notice of the lien to anyone interested in purchasing the property. Until the lien gets removed, the property may not be sold or given to anyone else. 

Defenses To Post-Judgment Collections

A judgment creditor has significant power to take your assets. But state and federal law place limits on what a debt collector can take. These limits, or exemptions, are in place to prevent you or your family from becoming destitute. Some major exemptions include: 

  • Federal benefits, like Supplemental Security Income, Social Security Disability Insurance, and Temporary Assistance for Needy Families

  • Child support payments

  • Exemptions outlined under state law, including a primary vehicle (up to a certain amount of equity) and special types of personal property, like prescribed medical equipment

  • Wages. Even though wages are subject to garnishment, federal law places limits on what judgment creditors may take. Creditors can only garnish the lesser of the following: 25% of a judgment debtor’s disposable earnings or an amount that exceeds 30 times minimum wage. 

How Long Does A Judgment Last? 

The answer to this question depends on what state law applies. Judgments can last anywhere from five to 20 years and are renewable. Depending on the state, a judgment can be renewed forever. If a judgment doesn’t get renewed before it expires, the balance will go away. As for how long a judgment will affect your credit history, that also depends on state law. 

According to the Fair Credit Reporting Act, a judgment will remain on a credit report for as long as it’s in effect. This begins with a minimum of seven years. If you’re in a state that allows renewable judgments, then a judgment could remain on your credit report forever.

Let’s Summarize… 

Having a judgment entered against you can feel unsettling. If a creditor secures a judgment against you, they may be able to garnish your wages or place a lien on your property. But remember, there are ways to get rid of the judgment or even stop it. 

One way to deal with a judgment against you is to file bankruptcy. Depending on your individual circumstances, you may be able to file bankruptcy without a lawyer using our free online tool. Otherwise, a bankruptcy attorney can help you figure out the best way to tackle your debt and move forward.



Written By:

Attorney Curtis Lee

LinkedIn

Curtis Lee is a writer and co-owner at Marvel Hill Freelance. Curtis earned his Bachelor of Science in Business from Wake Forest University and his Juris Doctor from Villanova University School of Law. After graduating law school, Curtis had the honor of clerking for a state cou... read more about Attorney Curtis Lee

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