Bill's Answer:
Answered by
Mark Cappel
Having a civil judgment against you will likely damage your credit score, but how much it will reduce your score greatly depends on the other items appearing on your credit report. For example, if you have numerous accounts reporting long positive payment histories, this single blemish on your report should not be detrimental to your credit profile. However, if you do not have a substantial positive credit history to balance out the negative impact of the judgment, your score could drop significantly.
I am glad that you have legal representation in this court case. You should work with your attorney to determine the best course of action available to you under the circumstances. Explain to your attorney that you are planning to purchase a home, and that you are worried about a judgment damaging your credit score. He may decide that settling the case, thereby preventing a judgment altogether, is the best course of action. Also, in some states, if a judgment is paid before it is recorded, it will never become part of the judgment records, and will therefore not appear on your credit report. Once a judgment is entered, you may be able to negotiate with the judgment creditor (the Plaintiff) to file a motion to have the judgment expunged as part of the settlement agreement. These last two options are much more difficult and time consuming that simply settling with the Plaintiff before the judgment is issued. Unless some fact that you do not mention in your question precludes settlement, I think you should discuss settlement options with your attorney before a judgment is entered against you. A judgment will almost certainly damage your credit score, so if a judgment can be avoided through a settlement, I would encourage you to consider that option.
To learn more about credit and credit scoring, visit the of Bills.com Credit Solutions and Resources page. See also the resources Collections Advice and Wage Garnishment and Liens & How to Resolve Them to learn more about your rights and liabilities.
Also, since you mention that you are planning to buy a home, you can read more information at the bills.com Home Purchase page.
I hope this information helps you Find. Learn & Save.
Best,
Bill
Sanaa M.
Philadelphia, PA | May 14, 2012
Philadelphia, PA | May 14, 2012
I was sued by a credit card company. My bank account was frozen and they took $1,000. I still owe about $1,800 and now I have judgment placed against me. This all happened in 2007. I want to pay it so it will come off my credit but I'm not sure of how to go about it. Should I offer to pay a reduced amount or pay the entire amount? Also should I call the lawyer or send a letter to inquire about paying?
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Bills.com
May 14, 2012
May 14, 2012
Four Bills.com reading assignments that will answer your questions:
- Debt Settlement Advice explains how to negotiate a settlement for debts in an amount that is less than the balance due.
- How to Obtain a Pay for Delete describes how a person can both settle a debt and have the derogatory removed from their credit report, which will likely improve their credit score.
- Fair Credit Reporting Act outlines the rules for which items can appear on a credit report and for how long.
- Foreclosure, Delinquency, Debt Settlement & Credit Scores describes the damage caused to a credit score by certain events, and has a link to a Bills.com page that shows how long it can take to recover from these events.
Please ask any follow-up questions you may have on the most appropriate page.
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Terry W.
Colma, CA | March 07, 2012
Colma, CA | March 07, 2012
I am applying for credit on a new car and there is a civil judgement for 16k on my credit score. If I remember correctly, this started in 2005 where I had to go to the hospital and had no insurance at the time. I didn't have money to pay so I ignored it. I received letters in the past but the name spelled on the letter does not match mine so I threw those away. Since this is in California, will this come off my credit report since its about 7 years, or will this stay on? Does statue of limitation apply to this?
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Bills.com
March 07, 2012
March 07, 2012
Under the FCRA, judgments are reported for 7 years or as long as they are valid, whichever is longer. A California judgment is valid for 10 years, and can be renewed. Therefore, a California judgment will appear on a person's credit report for 10 years.
The statute of limitations, or lifetime of a California judgment is 10 years from the date the judgment was entered. As mentioned, a California judgment can be renewed. The judgment gives the judgment-creditor the right, under California law, to garnish your wages, place a lien on your property, or levy your bank accounts. Consult with a California lawyer to learn more details about your rights under California law.
The statute of limitations, or lifetime of a California judgment is 10 years from the date the judgment was entered. As mentioned, a California judgment can be renewed. The judgment gives the judgment-creditor the right, under California law, to garnish your wages, place a lien on your property, or levy your bank accounts. Consult with a California lawyer to learn more details about your rights under California law.
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Danielle P.
February 14, 2012
February 14, 2012
Hi, I am trying right now to get per-approved for a mortgage loan with my husband under FHA. We have credit scores 670-720. The only thing I see as an issue is a judgement on 2/3 of my husband's credit reports. We actually settled and paid the company back before the judgement was filed. The account the judgement is for has a last payment date in early 2004, under the Fair Crediting act should this judgement be removed from his report because it is well past the 7 year mark for negative marks on the report?
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Bills.com
February 15, 2012
February 15, 2012
A judgment can usually stay on a credit report for as long as state law allows a judgment to run or for seven years, whichever is longer.
If the judgment was paid, then that should be noted in the credit report. The usual language says "judgment satisfied, indicating that you had a judgment but no longer owe the money. If the information in the credit report is not correct then you can dispute the item. I don't believe that that one item will disqualify you from the FHA loan, especially when you can prove to the underwriter that the debt has been paid.
If the judgment was paid, then that should be noted in the credit report. The usual language says "judgment satisfied, indicating that you had a judgment but no longer owe the money. If the information in the credit report is not correct then you can dispute the item. I don't believe that that one item will disqualify you from the FHA loan, especially when you can prove to the underwriter that the debt has been paid.
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Danielle P.
May 14, 2012
May 14, 2012
Thank you for your response to my initial question. We disputed the 2 bureaus that had the judgement still listed as unsatisfied. We supplied the settlement letter, the cashed checks w/d electronically, and the bank statements, stamped and showing the withdrawals they both marked it as satisfied at that point. We were approved for a home loan shortly after this. The only problem is literally 2 days later one of the bureaus changed the judgement on their report back to unsatisfied (I received no notification of this as well and this while I am set up for the credit monitoring and just saw it yesterday when I looked at our account with that bureau). We are getting ready to close on the 23rd of this month on a FHA loan, and I am concerned they will pull the one report that is reporting the status of this wrong. Will they most likely do this and even if they do will a lender typically take the proof I have listed as sufficient that we did pay this debt? Thanks very much :)
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Bills.com
May 14, 2012
May 14, 2012
Some lenders will pull an applicant's credit report moments before closing to see if the applicant's credit profile changed. Others do not, and it is up to the lender's underwriting department if it wishes to set and follow such conservative policy. In other words, I don't know what your lender will do.
Gather the proof you provided the bureaus, and draft a one-page, to whom it may concern letter explaining the evidence. Should your lender stumble across the erroneous information published by the credit reporting agency, you can spring to your defense with your cover letter and proof to knock down the false information.
Gather the proof you provided the bureaus, and draft a one-page, to whom it may concern letter explaining the evidence. Should your lender stumble across the erroneous information published by the credit reporting agency, you can spring to your defense with your cover letter and proof to knock down the false information.
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Larry W.
Los Angeles, CA | February 11, 2012
Los Angeles, CA | February 11, 2012
I heard through my old roomate a law firm plans to sue me for $4400, a past credit card. I've settled all my previous accounts except for this because the law firm had a bunch of arrogant punks calling me and harrassing me. I actually won a settlment out of court for a lump sum they just paid me for harrassment. My question is could the judge rule against me without them bringing proper paperwork? None of their documents have been sent to my current address. Also, I have moved counties so if the judge rules against me can they really find my info in a different county? I think they are lying about how much I owe on this card. What should I do? How would they find me, and I even switched banks...
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Bills.com
February 13, 2012
February 13, 2012
I cannot speculate on how a judge will make his or her ruling. If you do not represent your case in court, then there will be no one to dispute their paperwork. The creditor can certainly attempt to collect on the debt. They can attempt to find information about you through investigation tools available and they can continue to pursue a judgment. If you owe them money, then you may wish to reach a settlement agreement before a judgment is made against you.
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Jason R.
Chicago, IL | February 08, 2012
Chicago, IL | February 08, 2012
Hello
I was recently reviewing my credit report when I noticed that a Public Judgement placed against me on a piece of property that I sub-leased from another renter between August 2009 and August 2010.
In August 2011, a year later, the landlord defaulted on both his mortgage and condo association fees. The law states in Illinois there can be a judgment against those "in possession" of theunit, including renters for the condo association fees. For some reason, the attorney thought I still lived here.
I never received a summons for the lawyer representing the condo nor from the County Clerk. Even though I was moved out more than a year after this happened. I was still named in the class action. I have no idea how this happened.
Should I call the law firm representing the condo association or should I wait for Equifax to finish the investigation which will take till early March!. I feel completely helpless and I have no idea what to do. I really want to know how they were able to do this without even being able to contact me first. I still live in Chicago only a few blocks away.
Thanks :: J
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Bills.com
February 08, 2012
February 08, 2012
This is an odd rule, in my opinion, and one I had never heard of. It strikes me as unfair. Consult with an Illinois lawyer who has civil litigation experience to learn what defenses you have available.
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Joe P.
Hesperia, CA | January 27, 2012
Hesperia, CA | January 27, 2012
i owe a credit card company around 6400 dollars. they have begun the process of filing a judgement against me in the local county court. i am married, but my wife's name was not on the credit card. we currently own 2 cars. one is completely paid off and worth about 2000 dollars kelly blue blook. the other car we own will be paid off soon, and is worth about 5000 kelly blue book. i recently put the less valuable car in my wife's name, and the car that is worth more is currently in both of our names. my question is, once the judgement goes through, and once the car has been paid off, can they take the car that is worth 5000 dollars? if so, can they still take it if we put it just in my wife's name? also, is there any law that requires them to leave the husband with one car, and the wife with one car no matter what the cars' values are? (since we need at least one car each to get to our jobs, etc). lastly, besides paying off the judgement, what advice do you have in order to avoid having either of our cars taken away?
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Bills.com
January 30, 2012
January 30, 2012
You indicated you reside in California. See the Bills.com resource California Collection Laws to learn more about your rights and liabilities.
In particular, look at the exemptions California allows for debtors. You may want to consider placing the high-value vehicle in your spouse's name, and the low-value vehicle in yours.
In particular, look at the exemptions California allows for debtors. You may want to consider placing the high-value vehicle in your spouse's name, and the low-value vehicle in yours.
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Janey S.
Indiantown, FL | January 11, 2012
Indiantown, FL | January 11, 2012
can a car and/or boat be taken in a civil judgement if it is co-owned by me and another person?
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Bills.com
January 11, 2012
January 11, 2012
You indicated you reside in Florida. See the Bills.com resource Florida Collection Laws to learn more about your rights and liabilities in a debt collection situation. Ask any follow-up questions you may have on that page.
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Issiac F.
Franklin, TN | October 13, 2011
Franklin, TN | October 13, 2011
My wife and I are going through a divorce. One of my ex girlfriends took us both to court and accused me of taking her belongings when I moved out of her house (they were purchased on my credit card...) and claimed "conversion". I didn't go to court with an attorney and lost. The judge granted her a civil judgement against me and my wife (what makes this worse was my wife wasn't served or even there that day...it was terrible what happened...). Long story short the judge issued two seperate judgements, one against her and one against me. Everyone in the courtroom said this is insane. I was told by an attorney to appeal to circuit court. However, my wife and I are getting divorced now (it is amicable). My question is- since this is really unfair to her and had nothing to do with her, can I take that debt or "judgement" on me in our divorce? She did nothing wrong. My ex is just trying to be a horrible person to her & ruin our lives. She shouldn't have to wait through a circuit court trial.
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Bills.com
October 14, 2011
October 14, 2011
Alas, judgment-debtors cannot assign their liability for a judgment to someone else. You have three options: Appeal; pay the judgment; do nothing. My advice? Consult with a lawyer who has civil appellate experience.
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Al S.
September 25, 2011
September 25, 2011
I am German and lived in the US for 12 years. 2 years ago, I just gut married, my mom in Germany died. The following weeks I was flying forth and back taking care of my moms estate. During that time I discovered that my Dad needed me. Long story short. My husband deserted me, took all my belongings, had the checking account go bad, mortgage defaulted and house was foreclosed on. All while I was in Germany. I was trying to get my belongings but my dear beloved said he gave it all to Goodwill (thinking of calling the police on him). But my concern is: thou I want to continue living in Germany at this time in my live - I believe my husband has filed for divorce .. I pulled up my report and saw that I have 3 Civil judgements totaling about $25000. I have no idea how and what .. but how can I find out about these judgements and whom I have to contact to pay back the money?
Many thanks
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Bills.com
September 25, 2011
September 25, 2011
Your credit report should show whom you owe. You can contact them, if you wish. You may want to hire an attorney to advise you. It may be possible to negotiate a reduced settlement, even after judgment, if it is very hard for the creditors to domesticate the judgment overseas.
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Amy E.
Charlotte, NC | September 23, 2011
Charlotte, NC | September 23, 2011
My mother has a judgement $17,000, due to a bill created and unpaid by her ex husband. She set up payment terms with the collection office to pay off the debt, she has now been paying $200/month on time without fail, for the past 6 years and her last statement reflects that she still owes $12,900. How is this possible? I was wondering if it would be best for her to stop paying on the judgement, put the money in a savings account and try to negotiate with the creditor when she has a reasonable sum of money to offer? If she does stop payments on a judgement, will the credit score that she has spent years improving be negatively affected? Thank you for any advice on the matter!
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Bills.com
September 23, 2011
September 23, 2011
Bring your mother to a lawyer who has experience in bankruptcy and debt issues. I like the idea of stopping payment, saving a lump sum, and then negotiating a final settlement of the debt. A settlement should not have an impact on a consumer's credit score, unless the settlement includes a pay for delete agreement.
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