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Member
kimfl
Posts: 18
Registered: ‎08-07-2012
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What to do about a judgment

I am trying to rebuild my credit from a business failure in 2006, so that I may purchase a home ASAP. My credit for the past 4 years is perfect, but in 2006/07, my credit is terrible, although most of those old bills are past SOL. I have a judgment from 06 from a law firm for foreclosure defense, and when I spoke to a mortgage broker a few months ago, she told me that NO ONE would give me a mortgage until that was taken care of. Problem is, the judgment is far more than I can afford, and more than I make in a year, so I thought of offering them 10% of the full amount, paid at $100 per month, until it is paid, in exchange for showing the judgment as settled. My housing counselor (for the DPA I am hoping to use) has told me that doing this could adversely affect my credit, and suggested I just wait until March 2013, when it is scheduled to drop off my report. Who do I believe? I am afraid that if I wait, the DPA program will no longer have any money, and the housing market will have improved enough that I will be priced out of the market. But, if I try to negotiate a settlement, I'm afraid my steadily increasing credit score will drop, and that I will start the time clock on this debt that is due to expire soon. My current score is 651, and I feel like right now, it is not going much of anywhere until some of these old debts reach their age limit. What to do?

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guiness56
Posts: 22,406
Registered: ‎01-17-2008
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Re: What to do about a judgment

Making a settlement on a judgment will not hurt your score anymore than the judgment already did.

 

FICO does not care if it is settled or paid in full, only on a manual review will it make a difference.

 

What they are not telling you is even if the judgment does fall off, it doesn't "go away".  If you are seeking a mortgage of $150, 000 or more, the lender can see your entire credit file, which is where the judgment will be after it falls off.  This file includes every thing you have ever had creditwise, past and present.

Mega Contributor
RobertEG
Posts: 18,498
Registered: ‎03-19-2007
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Re: What to do about a judgment

[ Edited ]

The problem for the consumer is that a court has ordered them to pay the debt, so the creditor has much more than just a delinquent debt.

Exclusion from your CR does not negate the judgment.  Most judgments stay in force for 10 years,and the creditor can usually get an extension by showing that they have taken efforts to collect.  If you app for a mortgage and state that you have no unpaid, delinquent debt based only on CR exclusion, that might be a bit less than honest.

Being a public record, they can always identify any unpaid judgment through a standard public records search.

 

 

They can, of course, settle for less.  However, armed with a judgment that the consumer has failed to satisfy, they can go back to the court and ask for an additional order compelling collection of the debt (a writ of satisfaction), which can order the taking of assets or garnishment of pay.

That is probably the reason behind the advice you were given that attempting a settlement might result in other action on their part.

 

I would not hesitate to make a settlement offer, provided you have the funds to pay in full should they escalate or are willing to chance a writ of satisfaction.

You can always make it go away with a PIF.

Established Contributor
ktl72455
Posts: 835
Registered: ‎12-09-2012
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Re: What to do about a judgment

 A judgement will only fall off automatically  in 7yrs if paid in full before the 7yrs.

 

A judgement can be re-newed for another 7 yrs if not paid.

 

Theres no ducking and hiding and waiting for it vansih :-) I wish it was that easy for mine to go away too.

 

You should also ask if they will agree to vacate ( remove from credit report and court files) this trade line once it is paid.

 

 

 

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guiness56
Posts: 22,406
Registered: ‎01-17-2008
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Re: What to do about a judgment

[ Edited ]

No, a judgment, paid or unpaid will fall off in 7 years.  Only Tax Liens can stay longer if not paid.  They can stay for the length of the governing SOL but rarely do.

 

A judgment that is re-newed is only re-newed for the collection of the judgment, the SOL to collect.  It cannot be put back or extended on your CR for another 7 years.

 

 

Valued Contributor
annielorie
Posts: 1,206
Registered: ‎02-19-2012
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Re: What to do about a judgment


guiness56 wrote:

Making a settlement on a judgment will not hurt your score anymore than the judgment already did.

 

FICO does not care if it is settled or paid in full, only on a manual review will it make a difference.

 

What they are not telling you is even if the judgment does fall off, it doesn't "go away".  If you are seeking a mortgage of $150, 000 or more, the lender can see your entire credit file, which is where the judgment will be after it falls off.  This file includes every thing you have ever had creditwise, past and present.


What report that a lender gets can see past credit that is not on a given report other than a seach done by title company?


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Moderator
guiness56
Posts: 22,406
Registered: ‎01-17-2008
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Re: What to do about a judgment

[ Edited ]

It is your entire lifes credit file that is maintained by the CRAs.  It includes things that have fallen off your report due to age.

 

It can also be given to insurance companies for insurance over $150,000 and employers when your income is $75,000 or more.

 

This is per the FCRA 605.

Member
kimfl
Posts: 18
Registered: ‎08-07-2012
0

Re: What to do about a judgment

That doesn't make sense, because if that were the case, an old bankruptcy could still be seen years after it has been satisfied. And if it stays on any report that you can't see (which isn't fair, but don't even get me started on that), under public records, why would I not have access to that info?

 

I am still confused as to what to do. I DO NOT have the money to pay it in full, if you read my OP. It would take me YEARS to pay this in full. The judgment is for almost $32,000, and I want to offer them $3200, paid $100 a month for 32 months, and I want to show the judgment as being satisfied, and this would include a legal agreement that they could NOT collect any further amount. Other than the judgment being filed, I have not heard one word from them in 6 years.

 

I think what most of you are telling me is, go ahead and try to negotiate a settlement, and that it won't hurt my credit score. I don't make a lot of money, and managing to get that much, even $3200, at one time, is next to impossible. I owe taxes every year because I work 2 jobs, so a tax refund is out of the question. I have to pay this off a little at a time. Maybe I should just let sleeping dogs lie.

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annielorie
Posts: 1,206
Registered: ‎02-19-2012
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Re: What to do about a judgment

LET SLEEPING DOGS LiE!!!!!!!!!!! Deal with it after closing


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annielorie
Posts: 1,206
Registered: ‎02-19-2012
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Re: What to do about a judgment

Guiness56 this cannot be used in any way to determine if  a lender will give you a loan. If you think the housing market were slow before>>> A lender can  for tax liens and judgements  require you to pay them prior to close so that no other entity can make claim to the title and put the lender as second fiddle. 


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