Rebuilding Your Credit

[mxp114]

I'm helping a friend with a default judgment who just reached a settlement agreement to pay 45% of the judgment amount. They are going to send a letter that says upon clearance of the payment, it is paid in full/settled. Is this enough? What should the letter include? What does it need to say? Does it need to say that they will update the judgment to satisfied? And how do you go about making sure the judgment is considered satisfied? Any advice and information is greatly appreciated.

[drkaje]

Are they filing a motion to have the judgement vacated?

[pizzadude]

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mxp114 wrote:

I'm helping a friend with a default judgment who just reached a settlement agreement to pay 45% of the judgment amount. They are going to send a letter that says upon clearance of the payment, it is paid in full/settled. Is this enough? What should the letter include? What does it need to say? Does it need to say that they will update the judgment to satisfied? And how do you go about making sure the judgment is considered satisfied? Any advice and information is greatly appreciated.

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I would also ask the plantiffs/attorney to agree to file a motion to vacate the judgement in exchange for payment, that will allow it to be removed from your friend's credit report.

[mxp114]

She didn't pursue that since we figured they would want full payment? It also isn't on her reports and as of April 2013, couldn't be due to the five year limit for NY state. It's five years from filing. Outside of CR concerns, is there any other advantage to getting it vacated?

[mxp114]

In the event vacatur isn't an option, how can she be sure the issue is resolved and no further legal action? How do you verify a judgment is satisfied and who updates the record to reflect that? Thanks.

[RobertEG]

Upon satisfaction of the terms of a judgment, most judicial jurisdictions have requirements that the judgment creditor report its satisfaction to the court, thus rendering any subsequent legal action on enforcing the judgment moot with the court. 

Check out your state code, or call the clerk of the judgment court for the requirements upon satisfaction of the judgment.  You could also put such a stipulation in your payment agreement, but they are probably required to do so without the need to include it in your agreement.

Any settlement of a debt for less than the full amount permits the creditor to report an additional special comment to your CR reflecting that fact.

The creditor cant agree to vacate the judgment, as that is a court determination, but they should report that is has been satisfied.  Get them to agree NOT to report that the debt was settled for less than the full amount, and then it will read in your CR the same as if paid in full.

[mxp114]

So if the plaintiff update the clerk to say it is satisfied/paid in full, the judgment is marked satisfied and it's done? They can't re-open, re-sue or later ask for more money? That's what we want to avoid.

[RobertEG]

It would put the current judgment at end of enfoceability.

They would have to obtain a new judgment to enforce any new terms.  Highly unlikely if they state the debt is satisfied.

[mxp114]

Is it unreasonable to ask them to vacate as a condition of the offer? I guess it can't hurt to ask but how likely is it? I can't seem to find many success stories, outside of a few random ones that are too vague.

[RobertEG]

The judgment creditor cannot vacate a judgment.  Only the court can vacate its judgment.

Some courts will entertain a motion to vacate based on payment of the debt, and having the support of the judgment creditor eliminates issues as to whether they have accepted the debt as satisfied.