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Established Member
ewtrw
Posts: 15
Registered: ‎06-05-2011
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Old judgement has me terrified....

I am very intent on applying for a VA loan this coming June. My scores are good enough I think(660 range on TU and Exp) The only thing that scares me

is I have a 15000 dollar judgement from 2002 that I have never paid. It is no longer on my credit report though. Just how scared of this do you all think I should be. Thanks in advance for your coments.....

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p-
Posts: 2,612
Registered: ‎06-05-2008
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Re: Old judgement has me terrified....


ewtrw wrote:

I am very intent on applying for a VA loan this coming June. My scores are good enough I think(660 range on TU and Exp) The only thing that scares me

is I have a 15000 dollar judgement from 2002 that I have never paid. It is no longer on my credit report though. Just how scared of this do you all think I should be. Thanks in advance for your coments.....


From what I understand Judgements only remain on your CR up to 7.5 years after issue date...  but If I were you I would look up your local laws.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

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Lel
Posts: 5,268
Registered: ‎03-18-2008
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Re: Old judgement has me terrified....

Though judgments may drop off your credit report, the statute of limitations on judgments is often longer than for collections.  10 years is not uncommon, and in some cases it may be as long as 20 years.  In addition, judgments can be renewed, so even if the SOL is 10 years in your state, don't count on it being a non-issue when you look to buy a home.

 

And even though the judgment doesn't appear on your credit reports, it will be found during the title search and will need to be paid before closing.

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cdtotten
Posts: 951
Registered: ‎05-27-2009
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Re: Old judgement has me terrified....

+1 to Lel's post. The judgement will turn up during the title search and you will more than likely be required to pay something that large. I would be proactive in trying to get this issue resolved. It will be much worse if you ignore it and it turns up at the very end.


Starting Score: 627 EQ, 621 TU - 11/15/08
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92235
Posts: 140
Registered: ‎03-30-2010
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Re: Old judgement has me terrified....

Thanks for posting this OP. I might be in the market to buy a house next year. I am in just about the same boat. I have an unpaid judgment that fell off my report 3 years ago and the statute of limitations is over in my state. So they will make you pay this no matter what? Is there any way to get it expunged if it is past the SoL?

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Lel
Posts: 5,268
Registered: ‎03-18-2008
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Re: Old judgement has me terrified....


92235 wrote:

Thanks for posting this OP. I might be in the market to buy a house next year. I am in just about the same boat. I have an unpaid judgment that fell off my report 3 years ago and the statute of limitations is over in my state. So they will make you pay this no matter what? Is there any way to get it expunged if it is past the SoL?



The creditor may renew the judgment - I believe that in some states, judgments can be renewed for a period of time even after it has expired.  But sometimes the creditors don't renew the judgments at all.  I don't know how a title company or underwriter will look at an expired judgment that hasn't been renewed.

 

For the OP, $15,000 is a pretty big judgment.  If the creditor subscribes to one of the services that alerts it to the presence of new credit activity related to a mortgage application, they might start aggressively trying to collect - in their eyes, if you have money for a mortgage, then you have money to pay your judgment.

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PixieQueen80
Posts: 292
Registered: ‎01-05-2010
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Re: Old judgement has me terrified....

Since it was an old judgment (it fell off your report) I would contact them and try to settle for less than 50% of the owed balance.  I am not sure of your circumstances but income tax refunds are coming up so maybe you could use it to pay the judgment.  Good luck in whatever you decide to do.

Starting Scores (7/26/2010): EQ 517; TU 508; EX 527 (lender)
Scores Along the Way (11/4/2010): EQ 542; TU 547; (11/8/2010) EX Plus 641
Scores Along the Way: (4/15/2011): EQ 516; TU 622; EX 585 (lender)
Scores Along the Way: (8/25/2011): EQ 617; TU 627; EX 625 (lender)
Scores Along the Way: (11/28/2011): EQ 617; TU 645; EX 667 (lender)
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StartingOver10
Posts: 3,922
Registered: ‎03-06-2010
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Re: Old judgment has me terrified....


Lel wrote:
 The creditor may renew the judgment - I believe that in some states, judgments can be renewed for a period of time even after it has expired.  But sometimes the creditors don't renew the judgments at all.  I don't know how a title company or underwriter will look at an expired judgment that hasn't been renewed.

 

For the OP, $15,000 is a pretty big judgment.  If the creditor subscribes to one of the services that alerts it to the presence of new credit activity related to a mortgage application, they might start aggressively trying to collect - in their eyes, if you have money for a mortgage, then you have money to pay your judgment.


+1000

Judgments don't go away when they drop off your report.  The creditors know this. They actually count on the fact that you will eventually buy a property and you will be forced to pay the judgment in order to close. You are much better off negotiating the judgment before you even start to look for something to buy. Once they see that mortgage inquiry, the creditor gets intractable!

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p-
Posts: 2,612
Registered: ‎06-05-2008
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Re: Old judgment has me terrified....


StartingOver10 wrote:
...Once they see that mortgage inquiry, the creditor gets intractable!

All the more reason to opt out.  You could try, maybe you'll get lucky.  If the judgement holder doesn't know you're buying, and doesn't or can't renew the judgement, you might sail through.  I guess it would be a gamble.  If you get all the way to closing and make it, you've saved the 15k by not paying the judgement.

 

It would be smart to check out the laws in your state re: SOL, etc.  Find out when or how they can renew, and if you're really at risk.  Personally, I would not contact the judgement holder.  You can bet as soon asyou reopen negotiations it will pop right back up on your CR.   That will pretty much decimate your score anyway, so goodbye mortgage.

 

Do your homework evaluate the risk, and if you think it's worth it roll the dice and go for the mortgage.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

Valued Contributor
p-
Posts: 2,612
Registered: ‎06-05-2008
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Re: Old judgement has me terrified....


Lel wrote:

 

And even though the judgment doesn't appear on your credit reports, it will be found during the title search and will need to be paid before closing.



How does that work?  I know a title search looks for leins on the property being transferred, but where would they search for the judgement?  If it's not on your credit report, and you don't have a lein on any real property, where do they find it?  Are judgements listed on a database somewhere or do they contact all local or state courthouses?  The reason I ask is I had one as well that dropped off, and had no problem buying my house.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL


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