All About Judgment & Credit Card Debt

All About Judgment & Credit Card Debt

5 years ago while in college I had a judgment filed by a credit card company, What can I do to settle the original amount?

I am 28 years old. 5 years ago while in college I had a judgment against me filed by a credit card company. I never seen the judgment or the papers saying I had a case and where the case was filed because I was currently living at school where my permanent residence was. What can I do to settle the original amount with out paying all these extra fees. Again I was never given a copy of the proceedings.

  • One option is to file a motion to vacate the judgment.
  • Another option is to work out a lump-sum settlement with collection agent.
  • Consult with an attorney to discuss your options.

Unfortunately, the situation you describe is far too common. Aggressive collection attorneys and process servers are frequently careless about serving defendants properly, leading to default judgments against people who do not even know they were sued.

Concerned about what is appearing on your credit report now? Check your credit report today and get a free credit score instantly.

Civil Procedure and You

Many are unaware of these judgments until their wages are garnished or their bank accounts levied. The first step to fighting the judgment against you is gathering evidence that you were not served with the summons as the creditor claims. Contact the court clerk for the county in which the lawsuit was filed; ask him or her how to obtain a copy of the "Return of Service" filed by the creditor. You will probably need to go to the court house to retrieve a copy of the document.

You will then want to find some evidence you were not living at the address shown on the Return of Service, and that you could not reasonably be expected to receive a summons served at that address (for example, show your family did not live at the address).

Since you were at school at the time, you could probably obtain documentation from the school showing your address at school and your permanent address. If you are able to show the summons was not served at one of your listed addresses, nor at an address where you could be reasonable expected to receive it, you may be able to file a "motion to set aside default judgment."

However, given the length of time that has passed since the judgment was entered, you will probably be fighting an uphill battle.

If you plan to pursue the course of action described above, I recommend you consult with an attorney in your area who can advise you on the strengths of your case and your state’s Code of Civil Procedure.

"Civil procedure" is the area of law that concerns the rules parties must follow when litigating a lawsuit. The failure to follow state or federal civil procedure rules can cause a plaintiff (the party bringing the complaint) or the defendant (the party defending the complaint) to lose the lawsuit regardless of the merits of the case. In colloquial terms, civil procedure is the act of dotting Is and crossing Ts.

Judgment & Credit Card Debt Option 1

If you are able to have the judgment set aside, it will not free you from your obligation to the creditor, however the amount that you owe will be up to the court.

The creditor may be able to ask for the principal plus five years interest; however, if you can show that they committed a fraud on the court, the court may bar them from charging interest for the past five years. Again, these are issues that you should discuss with a qualified attorney.

Judgment & Credit Card Debt Option 2

Another option would be to contact the creditor’s attorney and try to settle the judgment. In my opinion, this would probably be the easiest way to resolve this debt. Though I do not know the balance of the judgment in question, if you can come to the table with cash in hand the creditor may be willing to settle this debt for much less than the actual balance, especially given the age of the judgment.

You should probably plan on paying anywhere from 50% to 70% of the balance, though the creditor may be willing to take less, or may ask for more. Usually, if a creditor is going to accept a settlement, it wants payment in a short time frame, so if you make an offer, make sure you have the cash available. Also, make sure you get a letter from the creditor or the law firm outlining the terms of the agreement before you make any payment.

If you want a third party debt help firm to advise and represent you, go to the debt relief savings center and get no-cost quotes from pre-screened service providers.

I hope his helps you make the right decision for your particular situation. If you would like more information, visit the Debt Help Information page.

I hope this information helps you Find. Learn & Save.




DDebbie Wallace, Mar, 2015

In Texas a judgement was placed on my husbands house in 2006 after his wife (now deceased) took out a credit card using all his information, maxed it out to 6000.00 and when the judgement information came in the mail she hid this from him. She died the following year. I married him in 2010, we tried to refinance his home (same home) in 2013 for lower interest and was told about the judgement. Do we contact Bank of America or the mortgage company? this was all done in 2006, in Texas i heard there was a 10 year rule, does this come off in 2016?

DDaniel Cohen, Mar, 2015

Judgments in Texas can be renewed, so the issue may very well not go away after 10 years. 

You will need to consult with a lawyer to see if it is possible to prove what the dceased wife did and if too much time has lapsed to make any claim at all. It is best not to delay when issues like this arise, so speaking with a lawyer as soon as the two of you became aware of the judgment in 2013 would have been advisable.

JJulie Sullivan, Apr, 2014
Hi Bill, I posted here 3 years ago about a judgment in VA and I'm a SC resident. Since then I hired another attorney who specializes in debt collection. She was unable to settle the debt. They refused to negotiate at all. Recently they called my cell phone and sent me a letter. If they knew I had legal representation, shouldn't they contact my lawyer? Lastly, the original debt, including attorney fees, was around $4500. Now the debt is over $9000 due to the 18% interest awarded in the default judgment. Since they won't settle, can I send them the original debt plus 9% interest, the current allowable interest rate for settlement debt in VA, and write on the cashier's check, that the amount being paid is for the original judgment plus 9% interest? That way if they try to domesticate the judgment in SC, they will only be suing me for interest. I'm concerned if I send them anything, they will apply it only to interest and still continue to go after me for more money. Please advise. Thanks!
BBill Admin, Apr, 2014
Welcome back.

These are great questions for your lawyer. In general, we do not recommend Restrictive Check Endorsements for the reason we discuss on the page just mentioned.

Since your last posting, we added pages outlining Virginia Collection Laws and South Carolina Collection Laws, which you may find helpful.
EErik Black, Sep, 2012
Hi. I got served for medical debt. I asked for and was provided validation of the debt. I now have court date. Can I still settle before going to court? Thanks or your time and assistance.
BBill Admin, Sep, 2012
Courts look favorably on out-of-court settlement as a way to resolve a dispute between parties. If both sides are reasonable in their negotiations, an out-of-court settlement often results in a better solution than a court's decision. You have nothing to lose by negotiating.
mm poore, Aug, 2012
After applying for a mortgage, I found out that I had a judgment against a college credit card. Judgment is from Jan 08. I called about the debt, principle of 4900, total with interest 18K. Is it unwise to call and offer a cash settlement or seek legal council first?
BBill Admin, Aug, 2012
No choice you make in this matter is free from potential harm. If you do nothing, you won't qualify for the mortgage. If you contact the judgment-holder, it is possible that they will not accept a settlement offer and pursue collections through a wage garnishment or bank levy. Contacting them may wake a sleeping dog.

Make sure to check your state's laws for how much interest can accrue post-judgment. Each state sets a limit on the interest rate a judgment-holder can charge. It seems to me that your debt should not have nearly quadrupled in just four years time.
AAlice L, Apr, 2012
While trying to get qualified for a home loan, I found out that my husband had a court judgment against him filed in Nevada. The date on the credit report says it was decided in 2008. He hasn't been contacted by the creditor in at least three years, and I'm wondering if we should even try to contact them. He is not even sure what it was for, although it probably was for student loans. The statute of limitations for a judgment in Nevada is 10 years, and the last correspondence he received about it was in 2005. Is it worth it to try to pay it or just let it ride and hope it eventually goes away. His wages have never been garnished, and we've put the home search on hold for a couple years. Also, I know the creditor can access bank accounts, but can they access bank security boxes? And we can't just put the assets in my name because Nevada is a community property state. I've thought about consulting an attorney. Thoughts?
BBill Admin, Apr, 2012
If you contact your husband's judgment-creditor, there is a risk that collections could accelerate. If you can "let it ride" and still qualify for the mortgage, that seems best. If you can't qualify for the mortgage, while the judgment is not satisfied, then you have to pay or settle the debt or postpone qualifying for the mortgage.

Creditors may not be aware of safety deposit boxes. If you have to make a declaration of all your property, you may have to include information about the contents of the safety deposit box.

If you decide that you need to contact the creditor, I think that consulting with an attorney about how best to structure your assets is a great idea, especially given the fact that you're in a community property state.