JUDGMENTS
Removing a judgment from your credit reports: How to
When a debt is in collections and you are
served, you are given about 30 days to object to the filing
if you have a cause. If you can prove that the debt is invalid
you can get the hearing dismissed. Additionally, if an agency
has sued you without giving you the mandatory 30 day notice
to dispute the validity
of a debt then that is a violation of the Fair
Debt Collections Practices Act. But if the debt is yours
and you know it then you should contact the JC (judgment creditor)
as soon as you are served. You want to avoid the entry of
judgment at all costs because it will simply ruin your credit.
Call, fax or mail a request to the person suing you and offer
a compromise to
settle
the debt in exchange of dismissing the case.
STEPS:: Three options: Question to
the CRA: Dismiss via Settlement: Vacate
There may be several ways to remove a judgment from your credit
reports. First is the judgment still legally allowed to be
on your credit reports? Look at
the SOL- statute of limitations for judgments and if your
state allows it to be renewed. If it is still LEGALLY on your
credit reports you should dispute it to the credit bureaus
before you contact the JC- judgment creditor. It may be deleted
without ever paying it! This is because many court records
are not verified in time when disputed. The bureau has 30
days to verify the accuracy of an item and to send a request
to the courts and to expect a reply within 30 days is a long
shot. We all know how slow the courts can be. If the court
does not verify the judgment within 30 days, the credit bureau
will delete it.
However if the item has been verified as
timely and you have no other documentation to prove it is
not valid then you can negotiate
with the JC to dismiss the judgment in exchange for
money. This is a much better rating than a "paid judgment".
It tends to indicate that it was dismissed therefore "legally
void". This IS a better rating than showing you
simply paid it- that means you owed it. Not much of a credit
improvement. Make sure when you negotiate with the JC that
you put your terms in writing and have the JC sign
and date it. This can be used for proof later if the rating
doesn't change. Once you agree, the JC will complete a form
to dismiss the judgment and file it with the court. All public
records are reported to credit bureaus so you should see your
new rating in about 30 to 45 days.
Finally, there is a procedure called a "motion
to vacate" a judgment. This procedure can be used if
you have good cause to believe you were sued in error, were
exempt because of retirement or SSI or served improperly.
The great news is that about 80% of judgments are awarded
in error- you just have to know what to look for. Getting
the judgment vacated means it does not stay on your credit
and you do not have to pay it so if you think you have a good
case for a vacate motion then by all means seriously consider
pursuing it. Contact
a lawyer about this issue. You can attempt to vacate
the judgment yourself or use a lawyer. If you do not know
a lot about it, you are better off hiring a lawyer for a few
hundred dollars.
Avoid judgments at all costs!!
The statute of limitations
(SOL) on judgments is long--very long usually 12 to 20 years
and many are renewable (a judgment may be renewed if the creditor
files a new suit seeking to renew the judgment prior to the
expiration of the original judgment) therefore the judgment
could follow you around forever. Even if you pay it you will
be stuck with a 'satisfied judgment" for 7 years from
date satisfied not filed! This can be a hopeless situation
so avoid being sued at all costs. Be sure to always check
your SOL for debts if you
have been served because if it is expired (and many debts
expire in 4-6 years) you can use that to dismiss the case.
Many debtors are served everyday for debts and they simply
do not show up in court and a default judgment is entered
against them- big mistake! Had half of them simply checked
their SOL they would have found that the debt may have expired
years before but since they did not dispute this, the judgment
was awarded. You can use an expired
SOL as a solid defense in court against a creditor/collector.
If you are
sued- never let a default judgment be entered
You
have nothing to lose by disputing the validity of the judgment
or even settling it out of court to avoid that nasty record
landing on your credit reports. Even if you owe the debt and
it is not legally expired under the SOL and you have no claim
to vacate it- you should attempt to settle it out of court---before
the court date so that it can be set aside. All the JC wants
is their money so calling them to work out a settlement is
the only smart thing to do. Otherwise you may be forced to
pay it later through wage levy or asset liens and not to mention
the damage it will have done to your credit.
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in dealing with judgment creditors and understand the process
and your rights. Getting hit with a judgment is very scary
and EXTREMELY CONFUSING. What happens after you have been
sued and had a judgment won against you depends on what you
do immediately. This complete article and two sample letters
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Learn More>>
Judgment Resources
Be sure to check with an attorney
if you have any legal questions concerning a judgment or lawsuit.
This article is for informational purposes only.
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