topic Re: Settle a default judgement in Rebuilding Your Credit

Settle a default judgement

Anonymous — Tue, 19 Feb 2013 05:26:55 GMT

A while back I had an issue that resulted in a default judgement. I was young and stupid, didn't know what to do, and it resulted in a default judgement.

The amount is around $6000. It shows in the Public section on my credit report and shows as coming off my report in September of this year.

However I'm considering buying a house before then.

The judgment was never paid and I still feel I don't owe the money (this wasn't a credit card), but my neglect was my own fault.

Should I try and contact the lawyer and settle for less than amount of the judgement? Or should I consider waiting this out until it comes off my report the end of this year?

Thanks!

Re: Settle a default judgement

RobertEG — Tue, 19 Feb 2013 10:28:45 GMT

Personally, I would attempt to satisfy the judgment.

Even after the reporting of the judgment is excluded from your CR, the public record is still available.

CR exclusion puts a bit of a shield over the discovery of unpaid, delinquent debt by way of a simple pull of the consumer's CR.

If a lendor does a public records search, they can still find it.

If a lendor simply asks if you have any unpaid, delinquent debt, CR exclusion would not be basis for answering no.

Your call.

Re: Settle a default judgement

rckstrscott — Tue, 19 Feb 2013 11:33:47 GMT

@RobertEG wrote:
Personally, I would attempt to satisfy the judgment.

Even after the reporting of the judgment is excluded from your CR, the public record is still available.
CR exclusion puts a bit of a shield over the discovery of unpaid, delinquent debt by way of a simple pull of the consumer's CR.
If a lendor does a public records search, they can still find it.
If a lendor simply asks if you have any unpaid, delinquent debt, CR exclusion would not be basis for answering no.

Your call.

This +1 -- Credit report isn't nessiciarily the only public record seach they will do. The exclusionary time frame for the judgement to report on a credit report doesn't mean it went away forever; now. That isn't to say it WILL come up when you apply, but you need to be careful. If you feel strongly you don't own the money, and your ethics allows you to say NO when you have outstanding debt, that is understood. But if they do a search and it comes back as you have a 6k judgement, the bank might immediately refuse to work with you going forward if they feel you fabricated any part of your application.

-scott

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 12:45:59 GMT

If im not mistaken, judgements are kind of tricky. Its my understanding that the plaintiff can actually request it be reinserted (or perhaps maybe not removed at all) if it is not satisfied. I could be wrong, or it may just be an individual state thing...but theres SOMETHING along those lines out there concerning unsatisfied judgements,

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 15:34:56 GMT

@Anonymous wrote:
If im not mistaken, judgements are kind of tricky. Its my understanding that the plaintiff can actually request it be reinserted (or perhaps maybe not removed at all) if it is not satisfied. I could be wrong, or it may just be an individual state thing...but theres SOMETHING along those lines out there concerning unsatisfied judgements,

No, once removed for age it cannot be reinserted. What you are talking about is renewing the judgment for collection purposes. It just gives another 10-20 years to collect depending on what state you are in and their laws.

Tax liens on the other hand can stay forever if not paid.

Re: Settle a default judgement

Andrew22 — Tue, 19 Feb 2013 15:34:57 GMT

Be careful.

If you settle, you could add a new account to your CR.

And, it will be all about HOW you settle. This was a default, and you said you had some doubts about the debt. If it was me, I'd get the case file and see what's in there. Perhaps you do owe a debt, but it does not mean you owe the debt to people who won the default judgment. I'd make sure they can prove ownership of the debt in accordance with state law, that the amount is correct, etc.

I would start from the perspective that you are going to move to vacate the judgment first, and work toward a settlement, if appropriate that way. At best, you find the people who wont your default are not the legal owners of your debt, and you can have it tossed, at worst, you give yourself a little room to negotiate.

Also, if you do settle, two key things: make an agreement that the creditor will move to vacate the judgment once paid, wipe it entirely from the court records; and be prepared to pay in a lump sum...

good luck!

Re: Settle a default judgement

Jeeper44 — Tue, 19 Feb 2013 15:42:35 GMT

I am in a similar situation with a judgement that's over 8 years old. It has come off my credit however its still affecting me. I am looking to build a new house on my property but found the old judgement also included a lien on my property. I can't do anything until I can get this cleaned up.

One thing to keep in mind is that judgements typically have a lot longer SOL. Where I live the SOL on consumer debt is 6 years, however with a judgement that extends to 20 years. That means if its not taken care of, 19 years later they can come back and try to collect. I would say you're better off trying to get this cleared up sooner than later. I'm having issues now because I can't find out who I need to talk to to get mine cleared up, because its been so long. As other's have mentioned, the CR is clean but it would still come up on a simple public records search showing that I owe the money.

Last spring I bought a camper. Although my credit has risen enough to allow me to purchase it, I still had an unpaid judgment on my CR. The bank specifically asked me if I had any documentation showing that I had paid it. They gave me the loan, but at a much higher interest rate than if I had been able to show I had satisified the judgement.

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 16:21:38 GMT

Thanks everyone for the replies! I have a few more questions. I definitely want to pay and have the judgement vacated and showed as paid. Should I begin with the law firm that represents the company or contact the company directly?

Without going into too much details about the issue I have, the company is a merchant account provider. They processed credit cards for my business. I'd love to dispute it, but I lost that chance so I just want to move on and not have this affect my credit any longer.

So I don't know where to begin now to settle on payment... with the lawyer they hired or the merchant account provider? It was a Civil Judgement and the company is listed as the plaintiff and the law fir is listed as the plaintiff's attorney.

Thanks again for the help!

Re: Settle a default judgement

rckstrscott — Tue, 19 Feb 2013 16:27:46 GMT

@Anonymous wrote:
Thanks everyone for the replies! I have a few more questions. I definitely want to pay and have the judgement vacated and showed as paid. Should I begin with the law firm that represents the company or contact the company directly?

Without going into too much details about the issue I have, the company is a merchant account provider. They processed credit cards for my business. I'd love to dispute it, but I lost that chance so I just want to move on and not have this affect my credit any longer.

So I don't know where to begin now to settle on payment... with the lawyer they hired or the merchant account provider? It was a Civil Judgement and the company is listed as the plaintiff and the law fir is listed as the plaintiff's attorney.

Thanks again for the help!

Well, you should talk to your clerk at the courthouse about vacating after its paid. In illinois, you can have a judgement vacated after you pay it.

Many jurisdictions allow this, many don't -- you should look into that

-scott

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 16:30:23 GMT

OK. Andrew22 had mentioned about to "make an agreement that the creditor will move to vacate the judgment once paid" Is that actually possible?

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 16:46:33 GMT

Yes, the judgment creditor or their attorney can file a motion to have it vacated once paid. You may also be able to depending on how the statutes read.

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 16:52:17 GMT

OK, thanks again to everyone.

What is the consensus on where I should start with the negotiation? The creditor or the attorney?

Also what specific things should I be asking them for? Signing some sort of agreement where the judgement is to be vacated as well as something in writing agreeing it has been paid?

Is a lump payment always the best in this situation or is a payment plan an option also?

Re: Settle a default judgement

Anonymous — Tue, 19 Feb 2013 16:57:35 GMT

Lump sum is best if you can do it.

You would probably need to call the attorney. Most of the time if one is involved that is who you are supposed to deal with. I would call and tell them you want to pay the amount and ask if they will have it vacated once paid. See if they will draft up a letter stating that.

Re: Settle a default judgement

Andrew22 — Tue, 19 Feb 2013 18:17:17 GMT

1) start with the courthouse. Get your file and review it closely. If the creditor who won the default judgment does not have the proper documentation that they are legal owners of the debt, you should file a motion to vacate. You have nothing to lose. And you need to have a chip in your favor to negotiate. Your chip is that you're going to make them spend more time in court to prove up their claim, and potentially hit them with sanctions if they have pressed a claim for a debt they do not legally own.

2) Also you should be prepared for negative action. If you contact the attorney chances are attorney is going to get your current information and attempt to garnish your wages immediately. That happens all the time. Whoever you contact, be careful with the info you share.

This is a delicate balancing act. You cannot just call up a collection lawyer and say, I'm ready to be good, let's deal. They only care about the money, and getting every penny. I applaud you for wanting to take responsibility, but I caution you to ensure you are doing so smartly and with the correct party.

Re: Settle a default judgement

RobertEG — Tue, 19 Feb 2013 19:39:57 GMT

+1 to Andrew's caution.

If you have an unsatisfied judgment and call with an offer to pay, that infers your ability to pay. They have a judgment ordering its payment, and yet you have not paid.

Pretty strong basis for informing the court that you have asserted the ability to satisfy the judgment, but have still not done so without additional concessions on their part not part of the judgment.

Ergo, a motion to ask the court for an order for immediate payment, such as via garnishment.

I would call the creditor first. They may refer to legal counsel, but I would start with them.

Re: Settle a default judgement

admise78 — Sun, 07 Apr 2013 00:10:51 GMT

Never satisfied a default judgment. It's called "default" for a reason. It was not a fair hearing in the eyes of the law, and judges like fair hearing. You should file a motion to vacate judgment and quash servivedwith the court that issues the default judgment if you can prove to the court that you were not properly served. You must give the court good reasons such as you were out of state, you have moved. 9 times out of ten the judge will grant you a hearing to prove yourself, and your proofs are sustainable and convinceable you motion to vacate and quash service will be granted!!

You will have to appear to file and appear to the court that issues the judgment.

you can do it yourself. You don't need a lawyer at all, but you need some knowledge of debt law like SOL in your state. Most likely the plaintiff might not show and win by default.