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Should I try to settle Judgment?

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MPStudio
Member

Should I try to settle Judgment?

I have 1 unresolved Judgement on my credit report and it scheduled to be deleted in September 2016. I am planning to apply to refinance my mortgage within the next month or two and I'm assuming they will want that paid. The Judgment is in the amount of $7564. The last coorespondence with the Collection Agency was a settlement offer they sent me in September 2011 in the amount of $2,647.

I'm looking for some advice if whether I should:

A) Contact the Collection Agency that filed the Judgment via telephone and offer them LESS than the last offer they sent me in 2011.

B) Go ahead and apply for the refinance and take it from there (fingers crossed they somehow miss the judgement lol)

C) Send a PFD settlement letter to Collection Agency, again offering less than they offered me in 2011. (I can only offer to pay $1200 right now.. so I'm not sure if they'd go for it)

 

I'm afraid that if I contact the Collector and *remind them* of my account, that they may deny my offer and renew the judgment if I don't settle by the time it's due to drop off. It is only reporting on ONE of my credit reports.. and I'm also afraid they may see that and then report to the others.

 

So confused and need some advice! Thanks in advance!

Message 1 of 8
7 REPLIES 7
StartingOver10
Moderator Emerita

Re: Should I try to settle Judgment?

That judgment either needs to be paid or you have a written agreement with the judgment lien holder for an installment payment and several (minimum 3) payments made before you ever apply for a refinance.

 

The lender won't approve your loan with an outstanding judgment that doesn't have a payment agreement and many will want it paid in its entirety.

 

If you do option B and apply for the refi now, you blow your chances of negotiating the judgment because the lien holder knows you have to have it paid prior to getting a new mortgage. They will stick to the full amount (usually) plus the statutory interest since the judgment was issued. 

 

BTW, it doesn't matter if the judgment is on your CR report or not. It is still in the public records and is good for 10 years or 20 years (depending upon your state's statutes for judgments) plus renewal for the same period, 10 years or 20 years. Some states allow unlimited renewals until paid. Check your public records. Take care of this first while you have good negotiating ability since they don't know you want to refi your mortgage. Don't tell them that either....

Message 2 of 8
Anonymous
Not applicable

Re: Should I try to settle Judgment?

Judgement renewal does not increase report time, it only gives them longer to try to collect via garnishment/account seizure/property lien.

 

The collector does not 'report' judgments. They are discovered by the CRA's themselves via third party services that check public records.

Message 3 of 8
RobertEG
Legendary Contributor

Re: Should I try to settle Judgment?

FCRA 605(a)(2)

"Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period."


 

Message 4 of 8
MPStudio
Member

Re: Should I try to settle Judgment?

Thank you for all of the great information!

Do you suggest calling and offering to settle or is it better to do it via mail?

If by telephone, is there any particular way I should word things? Or would I basically say "You have a judgement against me and I would like to settle this today. I have "x" amount of money that I can pay right now to take care of this"? If they don't agree to what I offer.. do I play hardball and say that is all I have, so I won't be able to settle?

 

I'm terrible at negotiating..

Message 5 of 8
MPStudio
Member

Re: Should I try to settle Judgment?

Is it better to offer a settlement over the phone, fax or through the mail?

Message 6 of 8
gdale6
Moderator Emeritus

Re: Should I try to settle Judgment?


@MPStudio wrote:

Is it better to offer a settlement over the phone, fax or through the mail?


I prefer communications to be in writing to protect my rights. If writing is not feasable or they refuse to acknowledge then a phone call might be in order.

Message 7 of 8
MPStudio
Member

Re: Should I try to settle Judgment?

Thank You. Are you able to point me in the right direction to find an example Settlement Letter? I couldn't seem to find one.

Message 8 of 8
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