Civil Judgement vs Bankruptcy (Chapter 7)

Anonymous · ‎11-10-2016

Does anyone know how a civil judgement effects your credit compared to a bankruptcy?

Both stay on the credit reports for 7 years, but are the credit reports adversely effected the same with bankruptcy compared to a civil judgment?

StartingOver10 · ‎11-11-2016

@Anonymous wrote:
Does anyone know how a civil judgement effects your credit compared to a bankruptcy?

Both stay on the credit reports for 7 years, but are the credit reports adversely effected the same with bankruptcy compared to a civil judgment?

A civil judgment lasts a lot longer than 7 years. It is ten years or 20 years plus renewal periods equal to the original (another 10 or 20 years). To see what the judgment period is in your jurisdiction, look up your state's statutes.

Remember, even if it falls off your credit report, it still shows as open the entire time and continues to accrue interest the entire time it isn't paid.

A Ch 7 lasts 10 years on your credit report. A Ch 13 lasts 7 years on your credit report. Either a Ch 13 or Ch 7 are easier to rebuild from after discharge than an open unpaid judgment. Naturally, it is much better to pay off the judgment than to file bk. The exception would be if you have no ability to repay any of your debt. That is what a bk is for - to give you a fresh start.

Anonymous · ‎11-11-2016

Oh...well shoot. I was hoping a BK and a judgement were the same in terms of hit to FICO scores, but they are not

Thank you for your comment.

That was the only thing preventing me from making a decision. Now that I know it's easier to rebuild from a satisfied judgement than a discharged BK, I will choose the satsified judgement even though it will keep me homeless for another 6-8 months.

Anonymous · ‎11-11-2016

@Anonymous wrote:
Oh...well shoot. I was hoping a BK and a judgement were the same in terms of hit to FICO scores, but they are not

Thank you for your comment.

That was the only thing preventing me from making a decision. Now that I know it's easier to rebuild from a satisfied judgement than a discharged BK, I will choose the satsified judgement even though it will keep me homeless for another 6-8 months.

The rebuild equation is far more complex than a simple "paid judgement vs a BK". You must consider what other derogs are present in your files. In the case of mutliple derogs - late payments, collections, charge offs, etc. - in addition to said judgement, then such a comparison is less than straightforward. In such instances, the judgement merely becomes one derog among many, all of which weigh down your scores. A BK, OTOH, essentially "cancels" all the prior derogs, effectively wrapping them up into one neat package called "IIB". As long as one proceeds with a planned rebuild path, a 700+ score is very common within 24 months of BK. However with multiple major derogs such a rebuild path is not so simple. My personal experiance at almost two years out from rebuilding, (and no new derogs in that time) was a score of mid 600's.

Anonymous · ‎11-11-2016

@Anonymous wrote:

The rebuild equation is far more complex than a simple "paid judgement vs a BK". You must consider what other derogs are present in your files. In the case of mutliple derogs - late payments, collections, charge offs, etc. - in addition to said judgement, then such a comparison is less than straightforward. In such instances, the judgement merely becomes one derog among many, all of which weigh down your scores. A BK, OTOH, essentially "cancels" all the prior derogs, effectively wrapping them up into one neat package called "IIB". As long as one proceeds with a planned rebuild path, a 700+ score is very common within 24 months of BK. However with multiple major derogs such a rebuild path is not so simple. My personal experiance at almost two years out from rebuilding, (and no new derogs in that time) was a score of mid 600's.

Dang, that's rough. Hopefully your scores improve as you get further away from the BK. I'm rooting for ya.

I'm in a position that the lawyer has forced me to either file bankruptcy or get a wage garnishment and property lein.

I'm currently jobless and homeless, so I don't have any property other than my $800 car, which they can't take from me.

I owe $9270 in credit card collection debt, and successfully negotiated that down to $6600, but they refuse to negotiate any further and want the money in 6 eqaul payments starting on December 23.

The problem is, I don't have money. I desperately want a home again especially now that it is getting cold.

I had an interview that went well this week and I have a career fair next week. I'm certain I will get some job offer, I just don't know how soon or how much or where it will be.

The lawyer wants me to make a decision by this coming Thursday if I am going to accept the $6,600 deal. If I do not accept it, they will pursue the full amount in wage garnishment now that they have a judgement against me. This is all just terrible timing and incredibly stressful on top of trying to figure out where I'm staying for the night.

My credit score is just 580 and with the judgement that was just made against me 10 days ago, I am likely going to see my scores drop with the new public record.

I can't afford an attorney, but the Legal Non-Profit attorney said they would help me file a bankruptcy pro se and it would cost $350 for a filing fee, no other costs other than time I have to spent filing it myself.

Honestly, it seems silly to go bankrupt when I could have it settle for $6,800. But I don't have the money they are asking for in the time frame they want it. If they would just hold off 3 months, I could get it. But, I understand they are playing hardball now that they have a court judgement.

Alternatively, for $350 I could make this all go away with filing a bankruptcy with the help of the non-profit attorney...the problem is I fully expect to have a $40k year job in a few weeks. So, by the tiime the bankruptcy is completed and done with, I would have made enough to pay off the debt.

Sorry, I didn't intend to discuss anything more than the topic of bankruptcy vs civil judgement, but I guess I just needed to type out my personal frustrations.

StartingOver10 · ‎11-12-2016

The lawyer that is forcing you to make a decision now - doesn't he represent the creditor? If so, then it is his job to intimidate you. Don't file Bk because of this attorney.

Since you have a judgment already and you really are judgment proof - he can't do anything other than intimidate you. You are homeless, no job, no credit, no assets - this is the very definition of judgment proof (you can have a judgment against you, but there is no way to collect on the judgment).

If I were in your shoes, I wouldn't file Bk now - not over $6800. Get your job first then go back to that creditor and negotiate a payment plan. You can always file Bk, but don't do it without careful consideration. Filing Bk now, without a job, is not good timing IMO. If you file now, it will discharge current debt, but what if you get additional debt after the Bk filing and before you land your job? What happens then? Get your job first. Don't let that attorney push you into doing something that is not in your best interest.

Anonymous · ‎11-16-2016

@Anonymous wrote:

@Anonymous wrote:

The rebuild equation is far more complex than a simple "paid judgement vs a BK". You must consider what other derogs are present in your files. In the case of mutliple derogs - late payments, collections, charge offs, etc. - in addition to said judgement, then such a comparison is less than straightforward. In such instances, the judgement merely becomes one derog among many, all of which weigh down your scores. A BK, OTOH, essentially "cancels" all the prior derogs, effectively wrapping them up into one neat package called "IIB". As long as one proceeds with a planned rebuild path, a 700+ score is very common within 24 months of BK. However with multiple major derogs such a rebuild path is not so simple. My personal experiance at almost two years out from rebuilding, (and no new derogs in that time) was a score of mid 600's.

Dang, that's rough. Hopefully your scores improve as you get further away from the BK. I'm rooting for ya.

I'm in a position that the lawyer has forced me to either file bankruptcy or get a wage garnishment and property lein.

I'm currently jobless and homeless, so I don't have any property other than my $800 car, which they can't take from me.

I owe $9270 in credit card collection debt, and successfully negotiated that down to $6600, but they refuse to negotiate any further and want the money in 6 eqaul payments starting on December 23.

The problem is, I don't have money. I desperately want a home again especially now that it is getting cold.

I had an interview that went well this week and I have a career fair next week. I'm certain I will get some job offer, I just don't know how soon or how much or where it will be.

The lawyer wants me to make a decision by this coming Thursday if I am going to accept the $6,600 deal. If I do not accept it, they will pursue the full amount in wage garnishment now that they have a judgement against me. This is all just terrible timing and incredibly stressful on top of trying to figure out where I'm staying for the night.

My credit score is just 580 and with the judgement that was just made against me 10 days ago, I am likely going to see my scores drop with the new public record.

I can't afford an attorney, but the Legal Non-Profit attorney said they would help me file a bankruptcy pro se and it would cost $350 for a filing fee, no other costs other than time I have to spent filing it myself.

Honestly, it seems silly to go bankrupt when I could have it settle for $6,800. But I don't have the money they are asking for in the time frame they want it. If they would just hold off 3 months, I could get it. But, I understand they are playing hardball now that they have a court judgement.

Alternatively, for $350 I could make this all go away with filing a bankruptcy with the help of the non-profit attorney...the problem is I fully expect to have a $40k year job in a few weeks. So, by the tiime the bankruptcy is completed and done with, I would have made enough to pay off the debt.

Sorry, I didn't intend to discuss anything more than the topic of bankruptcy vs civil judgement, but I guess I just needed to type out my personal frustrations.

I'm not 24 months from BK - just a heck of a lot of derogs, collections judgements, etc. I am however, preparing to file, thanks to an old medical debt judgement from 2010 that I just can't afford, on top of credit card debt that piled up over the summer for various reasons.

Ask the A-hole lawyer just who he intends to send the garnishment to? Your last employer? Good luck with that! I would tell him "See you at the 341 meeting, I'm sure your client will be happy about YOU losing them over $9K"

A BK in your position is quite appropriate, particularly with such an intransigent creditor/lawyer.

Scupra · ‎11-16-2016

@Anonymous wrote:

@Anonymous wrote:

The rebuild equation is far more complex than a simple "paid judgement vs a BK". You must consider what other derogs are present in your files. In the case of mutliple derogs - late payments, collections, charge offs, etc. - in addition to said judgement, then such a comparison is less than straightforward. In such instances, the judgement merely becomes one derog among many, all of which weigh down your scores. A BK, OTOH, essentially "cancels" all the prior derogs, effectively wrapping them up into one neat package called "IIB". As long as one proceeds with a planned rebuild path, a 700+ score is very common within 24 months of BK. However with multiple major derogs such a rebuild path is not so simple. My personal experiance at almost two years out from rebuilding, (and no new derogs in that time) was a score of mid 600's.

Dang, that's rough. Hopefully your scores improve as you get further away from the BK. I'm rooting for ya.

I'm in a position that the lawyer has forced me to either file bankruptcy or get a wage garnishment and property lein.

I'm currently jobless and homeless, so I don't have any property other than my $800 car, which they can't take from me.

I owe $9270 in credit card collection debt, and successfully negotiated that down to $6600, but they refuse to negotiate any further and want the money in 6 eqaul payments starting on December 23.

The problem is, I don't have money. I desperately want a home again especially now that it is getting cold.

I had an interview that went well this week and I have a career fair next week. I'm certain I will get some job offer, I just don't know how soon or how much or where it will be.

The lawyer wants me to make a decision by this coming Thursday if I am going to accept the $6,600 deal. If I do not accept it, they will pursue the full amount in wage garnishment now that they have a judgement against me. This is all just terrible timing and incredibly stressful on top of trying to figure out where I'm staying for the night.

My credit score is just 580 and with the judgement that was just made against me 10 days ago, I am likely going to see my scores drop with the new public record.

I can't afford an attorney, but the Legal Non-Profit attorney said they would help me file a bankruptcy pro se and it would cost $350 for a filing fee, no other costs other than time I have to spent filing it myself.

Honestly, it seems silly to go bankrupt when I could have it settle for $6,800. But I don't have the money they are asking for in the time frame they want it. If they would just hold off 3 months, I could get it. But, I understand they are playing hardball now that they have a court judgement.

Alternatively, for $350 I could make this all go away with filing a bankruptcy with the help of the non-profit attorney...the problem is I fully expect to have a $40k year job in a few weeks. So, by the tiime the bankruptcy is completed and done with, I would have made enough to pay off the debt.

Sorry, I didn't intend to discuss anything more than the topic of bankruptcy vs civil judgement, but I guess I just needed to type out my personal frustrations.

Wow, hang in there! You sound like a very tough person on a good path. Will keep my fingers crossed that things start turning around for you.