Have you pulled a fresh report?
SCRA violations are serious, and collectors are usually quite tense about them. The SCRA (Servicemembers Civil Relief Act) is the nextgen sort of iteration of the old Soldiers and Sailors Relief Act.
The SCRA provides you some hope, if:
1. The unpaid rental debt was incurred directly by the servicemember as a result of a deployment lasting 90 days or longer; and
2. The judgment court did not qualify their judgment with a statement or by demanding a bond from the plaintiff (the landlord).
The SCRA provides, among other things, the right for a servicemember on active duty who is deployed on an assignment of greater than 90 days to vacate/terminate a residential lease with no penalty. There are a few cases where state laws slightly change this, but in general it applies across the board. There are notice requirements and such, which vary by state, where you have to tell your landlord in writing or otherwise give some sort of required notice that you are vacating your unit because of deployment.
The SCRA also provides protection with regard to interest on anything owed, so even if you couldn't get the judgment overturned (which seems likely to happen anyway), you are protected by the SCRA which locks in any debt you held as of the date of your deployment at 6% maximum interest while on active duty. This doesn't make the entire judgment invalid automatically (again, a judge should overturn it anyway, but just in case), but it would greatly reduce the balance owed. This perk may not be available to you, depending on your current status, though - you have to apply for this within 180 days of the end of active duty.
The reporting part, which you are most concerned with anyway, is a direct result of the judgment process.
That being said, when a collector is notified of a dispute, they have two options. One, they can just stop reporting. Most often, in older cases, this is the route they choose. Secondly, they can send a written notice to the debtor that they have received the dispute and are investigating. The FCRA and the states all have varying timelines - many are 60 or 90 days - during which the collector is allowed to investigate, and the reporting agencies are supposed to report this activity as dispute in progress, or whatever phrase they use for that. At the end of the investigation period, the collector must provide results in writing. This all takes energy on their part, which is why on older debts they tend to just drop the reporting and be done with it. This dropping of reporting will help a credit report, but it doesn't make the underlying issue leave the file - the judgment, in your case.
This is why I asked about you pulling a report a month after you sent them your letter - they may have just dropped it. They aren't required to tell you if they just drop the reporting.
You need a good consumer/credit attorney licensed in Kentucky - you have to attack a judgment where it was "born." I work for a firm that does this stuff here in Texas, but we don't have anyone licensed in Kentucky. Your best bet is probably to contact the Kentucky bar or a national website/referral agency who can help you find someone in Kentucky. You won't have to go there yourself up front, you can sign affidavits and such from e-mail or fax if need be.
