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Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

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Member

Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

I got served papers from a junk debt collector for $1800. I am questioning whether or not to keep fighting them.

 

My answer:

DENIED. Defendant is without information or knowledge sufficient to form an opinion as to the truth or accuracy of Plaintiff’s claim, and based on that denies generally and specifically Plaintiff’s claim.

 

I also put in a request for production, asking for a multitude of things that they shouldn't be able to provide that will decredit this case in my favor, like a copy of the signed credit app by defendant (me). 

 

-

 

But I am still worried. I haven't got a response back from my request for production or my answer. But someone is telling me that if we do end up going to court, and it doesn't go in my favor, that I will have a judgement on my credit report and that will be just as bad as a bankrupcty.

 

My questions are, if they do go through with court and it doesn't go in my favor:

 

Will the judgement disappear off my credit once it is paid off? 

If not,

Is it just as bad on my credit report as a bankrupcty is?

or

Should I not take chances and settle this outside of court?

 

My credit is at 600, and would like to keep moving foward so I can buy a house and just need some advice on the best move I should make on this situation because I am lost!

 

 

 

11 REPLIES 11
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Senior Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

It could muck up a bk I think....somebody will chime in soon.

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 2 of 12
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New Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

I did a lot of research after a junk zombie debt company (who actually may be a scam from everything I can tell) ended up with a really old debt that I don't actually owe (paid to orginal creditor).

 

Junk debt buyers file these lawsuits hoping that you will be one of the 90% of debtors who don't show up, thereby receiving a default judgement. You did the right thing by answering. My number one lesson learned from all my previous financial troubles was, never ignore a lawsuit from a debt collector!

 

On to, can they prove it.

 

First, make darn sure it's within the statuate of limitation for your state. Usually by the time a debt has reached the junk buyers, it can be really old, and they are just hoping that their $25 filing fee pays off with you not showing up. If the debt is outside the limit, all you have to do is tell the judge that you beleive it's too old to collect. The burden of proof is on the debt collector to prove it isn't. 

 

Second, junk debt buyers have to show a paper trail of ownership of your debt back to the original creditor. That means they have to have all documentation of all changes of hand of your debt including signed applications, the invoice from the original creditor showing the final charged off balance, and all paperwork for the purchases. These companies literally buy junk debt for pennies in massive digital bunches. The chances of them having all or even some of that stuff is very slim. 

 

Stay on top of it, find the court's website and watch your case docket. From what I read, most of these places will just never respond and the case will get dismissed.

 

If the debt is legit and they are legit and have all the documentation, they would win their case. In that case... would it show up on your credit report. My understand is that the laws regarding judgements showing up on credit reports has changed and that they no longer show up on credit reports (or it's incredibly difficult for them to report it) I can't say for sure that it wouldn't, but the judgements I had prior to my BK never showed up on my credit reports and they had been obtained almost a year before filing. 

 

At this point, they already spent the money to file and if they are legit, they most likely won't just let the case go if it's strong. They would instead make you sign a consent judgement (this is what happened with me after 2 collection agencies sued me), which basically gives the the  ability to garnish you if you fail to pay them. They usually won't give that up.

 

Good luck!

Message 3 of 12
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Community Leader
Mega Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

I believe a judgement stays on your report for 10 years. Probably what they meant. And even if it doesn't appear on your report, someone like LexisNexis will have it.







Message 4 of 12
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Legendary Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

Exclusion of civil judgments from consumer credit reports is covered under FCRA 605(a)(2), and is the later of 7 years from date of entry of the judgment by the court, or until the expiration of the statute of limitations on enforcebability of the judgment, whichever is longer.

 

Technically, if a judgement remains unpaid, it is not required to be excluded until the statute of limitations of enforceability of the judgment has tolled.  Most judgments have an initial period of enforceability of 10 years from date of entry, but can be extended upon motion by the prevailing plaintiff, so could extend indefinately.

 

Anecodotal posts here in the forum routinely show that the CRAs appear to have a standard exclusion policy of simply excluding at 7 years from date of entry of the judgment, and dont normally consider whether the judgment remains unpaid and still enforceable, and thus dont normally extend the exclusion date based on whether the judgment remains enforceable. 

However, section 605(a)(2)clearly permits them to do so if desired.

 

Yes, a civil judgment is a major derog and has substantial scoring impact until its removal.

 

Message 5 of 12
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New Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?


@RobertEG wrote:

Exclusion of civil judgments from consumer credit reports is covered under FCRA 605(a)(2), and is the later of 7 years from date of entry of the judgment by the court, or until the expiration of the statute of limitations on enforcebability of the judgment, whichever is longer.

 

Technically, if a judgement remains unpaid, it is not required to be excluded until the statute of limitations of enforceability of the judgment has tolled.  Most judgments have an initial period of enforceability of 10 years from date of entry, but can be extended upon motion by the prevailing plaintiff, so could extend indefinately.

 

Anecodotal posts here in the forum routinely show that the CRAs appear to have a standard exclusion policy of simply excluding at 7 years from date of entry of the judgment, and dont normally consider whether the judgment remains unpaid and still enforceable, and thus dont normally extend the exclusion date based on whether the judgment remains enforceable. 

However, section 605(a)(2)clearly permits them to do so if desired.

 

Yes, a civil judgment is a major derog and has substantial scoring impact until its removal.

 


So I'm curious on this then. If you Google Judgement on credit report, you will find several articles that indicate that due to changes to the FCRA, Civil Judgments and tax liens will no longer show up on credit reports. Experian on their blog clearly says that this is the case and that they don't report civil judgements. Googling Does experian report judgements backs this up further with several recent articles in the second part of 2018 stating that only Bankruptcy is reported on credit reports.

 

The section you quoted makes it sound like they can report, but the CRA's are saying they don't report. 

 

In an article I found (not going to name it because I'm not sure I can mention other sites on here) I found this quote from an article that was done in Sept 2017:

 

"Beginning July 1, 2017, the bureaus will exclude all public tax lien and civil judgment data that do not conform to new reporting standards from consumers’ credit reports. According to the Consumer Data Industry Association, new and existing tax lien and civil judgment data must include a person’s name, address and either a Social Security number or date of birth in order to be included in credit reports. Additionally, the credit bureaus must continually verify public record information by making courthouse visits at least every 90 days."

 

Maybe they are still allowed under the FCRA to report, but the part about having to verify the public information every 90 days is what stops them?

 

Anecdotaly, my two judgements which were obtained in middleish 2017 never showed up on my credit report for over a year before my BK. 

Message 6 of 12
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Legendary Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

The CRA policy you are referring to is not based on any change or amendment to either the FCRA or any federal regulations.

It is based entirely on a civil settlement agreement based on and resulted from a class action suit titled Jenkins et al v. Equifax, still pending before the U.S. District Court of the E.D. of Va, in which the issue raised by the class plaintiffs is the procedure for recording public record information in consumer credit reports.

 

The parties reached a settlement agreement that is still being implemented, one part of which is the agreement not to include public record tax liens and judgments unless the reporting included at least the address or date of birth of the consumer.

That policy has subsequently been established by each of the big-3 CRAs as internal policy, and is published as such in their joint document titled the National Consumer Assistance Plan. 

 

Message 7 of 12
Valued Member

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

          Years ago I took some bad advice from online who told me to write my creditors and to "Not contact me anymore letter" which by law they have to stop contacting you, However now it opens a new can of worms and opens the door where they can take you to small claims court and sue you for the money, Which I wasn't aware of. I was being sued from the creditor for $1,000. For an unpaid credit card debt. I went to court and told the court I was on disability and cannot afford to pay back the monies they are asking. By law creditors cannot take monies up to 2 months worth funds from Social Security from your bank account. The Judge told the creditors that he will do a "Pay Later" Judgement on me, meaning that it showed on my Credit Report as "Public Debt" for 7 years. Also the SAME DEBT shown on my credit report as a "Charge-Off" for 7 years. WARNING: Even though most states have a 7-10 Year Negative Report on you for Chargebacks, Nonpayments, Leins, etc. If you contact the creditor and your wanting to make any payment to them, Then you RESTART THE CLOCK  of your Negative Report on you, Which can effect your credit score even further. The Credit card company since then has not contacted me back asking me for the funds. I have heard from credit repair companies on youtube not to pay off creditors because even if you pay off the debt in full, The Charge-off will STILL show on your credit report with a negative score but it will show "Paid-In-Full" like mine did on 2 accounts. As of March 2018 I had 2 Charge offs dropped from my credit report and started with a $600 Fingerhut, $200 Secured Capital One, $2500 Walmart Card which since then has greatly raised since my credit score went up in the 700's. I highly recommend that you watch youtube videos on how you can Do-It-Yourself Credit Repair Videos and get your FREE Credit Report online, Check it for mistakes and then mail each creditor and credit reporting agency of any mistakes on your credit report. By law they have to answer you by mail (Not email) within 30 days otherwise by law they MUST remove the item off your credit report. Make sure you get copies of everything you send them, send it by Registered, Certified Mail as proof you sent the letters to them. I did this and my score jumped 60+ Points in one month.





Not Bad For Someone on Social Security, Credit Limit Total: $12,551. Best Credit Scores EX-686, TU-717, EQ-725
Starting Score: 558
Current Score: 686
Goal Score: 850

Message 8 of 12
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Frequent Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?


@FreeIsForMe2019 wrote:

          Years ago I took some bad advice from online who told me to write my creditors and to "Not contact me anymore letter" which by law they have to stop contacting you, However now it opens a new can of worms and opens the door where they can take you to small claims court and sue you for the money, Which I wasn't aware of. I was being sued from the creditor for $1,000. For an unpaid credit card debt. I went to court and told the court I was on disability and cannot afford to pay back the monies they are asking. By law creditors cannot take monies up to 2 months worth funds from Social Security from your bank account. The Judge told the creditors that he will do a "Pay Later" Judgement on me, meaning that it showed on my Credit Report as "Public Debt" for 7 years. Also the SAME DEBT shown on my credit report as a "Charge-Off" for 7 years. WARNING: Even though most states have a 7-10 Year Negative Report on you for Chargebacks, Nonpayments, Leins, etc. If you contact the creditor and your wanting to make any payment to them, Then you RESTART THE CLOCK  of your Negative Report on you, Which can effect your credit score even further. The Credit card company since then has not contacted me back asking me for the funds. I have heard from credit repair companies on youtube not to pay off creditors because even if you pay off the debt in full, The Charge-off will STILL show on your credit report with a negative score but it will show "Paid-In-Full" like mine did on 2 accounts. As of March 2018 I had 2 Charge offs dropped from my credit report and started with a $600 Fingerhut, $200 Secured Capital One, $2500 Walmart Card which since then has greatly raised since my credit score went up in the 700's. I highly recommend that you watch youtube videos on how you can Do-It-Yourself Credit Repair Videos and get your FREE Credit Report online, Check it for mistakes and then mail each creditor and credit reporting agency of any mistakes on your credit report. By law they have to answer you by mail (Not email) within 30 days otherwise by law they MUST remove the item off your credit report. Make sure you get copies of everything you send them, send it by Registered, Certified Mail as proof you sent the letters to them. I did this and my score jumped 60+ Points in one month.


It is not true that contacting a creditor and making a payment after an account has been charged off will restart the 7-year reporting period.  The 7-year period starts at the “date of first delinquency” which led to default.  Once an account has been charged off, that date cannot be changed.  Therefore, making a payment will not have an effect on the date of first delinquency and will not restart the reporting period. 

Message 9 of 12
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Community Leader
Senior Contributor

Re: Getting sued by junk debt collector, Is a judgement just as bad as bankruptcy?

^^^ correct, DoFD and therefore drop off dates are essentially set in stone. What I believe can be restarted is the SOL for suing for the debt, if you begin to make payments and subsequently default.


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