Judgements on your credit report can be one of the most difficult items to remove from your credit file. This is because judgements involve a court order to pay, and creditors have several rights attached to winning a judgement against you. Having judgements on your credit report also means that you may have to deal with issues such as wage garnishment and liens.
However, you also have rights when it comes to resolving judgements on your credit report, and a skilled attorney that specializes in credit repair may be able to help you. This is especially true if your creditors did not follow proper procedures when filing the judgement against you.
What is a Judgement?
If you are taken to court over your debt, the judge may order you to pay the past due amount owed to the creditor. This is a “judgement” which is then placed on your credit file. While the court order does not compel you to pay immediately, it does open the doors to other issues including:
- Wage Garnishment – in this embarrassing situation, your employer will be notified of your debt and required to withhold a portion of your pay from each check in order to pay it off.
- Frozen Bank Accounts – there are certain types of income that are exempt from garnishment, but the banks will freeze your accounts until it can be discovered which amounts are exempt and which are not
- Liens Attached to Property – if you own a home or other property, the judgement against you can result in a lien – essentially, whenever you sell the property, part of the proceeds will be used to cover the debt. If the debt is greater than the amount you sell the property for, the entire amount will go to the debt collector.
The only way to have garnishment reduced is to go to the courts – the creditor cannot reduce the payments required once the courts are involved. Additionally, the judgement can remain on your credit report for 7 years, or up to the statute of limitations for reporting judgements in your state.
Are Judgements on Your Credit Report?
If you haven’t been served a court order, you may not realize a judgement was entered until the wage garnishment or other negative activity starts. If a creditor threatens to send you to court, it’s best to act quickly to avoid having a judgement entered in the first place.
**In addition, some kinds of records have no reporting limit, including criminal convictions, credit information reported in response to an application for a job with a salary of more than $75,000, and credit information reported because of an application for more than $150,000 in credit or life insurance.
You Can Fight Back Against Judgements on Your Credit Report
If the creditor did not follow the law in filing the judgement, you can ask the judge to “vacate” the judgement. This essentially nullifies it, and renders the judgement against you void. This means it will be removed from your credit report and creditors will not be able to garnish your wages or attach a lien to your property.
There are several reasons why a judge may vacate previous judgements on your credit report, including:
- No proof that you were properly served in the initial filing
- No proof that the debt is legal – errors in the amount, the dates, names on the debt, etc.
- You were not able to answer the summons due to a valid reason
- The collection agency violated the FDCPA – did not provide validation, etc.
If it is your word against the collection agency’s with no proof, in many instances you may be able to have the judgement vacated.
If the collection agencies did not follow proper procedure, your best bet is to ask for the judgement to be vacated as soon as possible in order to minimize potential damage to your credit scores.
What to do if Judgements on Your Credit Report are Upheld
If the judgements are valid, the only way to get rid of them is to pay them off. And because of the legal nature of the judgement, you will not have much leeway in terms of payments and payment terms. You can go to the courts and ask for an adjustment, but be prepared to have an itemized list of your bills and expenses to show the court why you can’t afford to pay the usual amount.
Once the judgement is paid off, it will be removed from your credit report, but just establishing a workable payment plan will not help your credit scores.
The best way to handle judgements on your credit report is to be proactive. Simply “waiting it out” won’t work when it’s a legal ruling against you that can negatively impact your income and bank accounts. You need to work with a legal professional that specializes in credit repair in order to resolve the issue as soon as possible.