Judgments and their affect on your credit

How long does a judgment remain on your credit profile? What is the difference between a judgment and any other collection account? Every year, more and more consumers find themselves with judgments on their credit report and are unclear where they came from or how to deal with them.

A judgment is a claim against an individual or business for the payment of money damages. It is the result of losing a law suit.

Many times a consumer moved from the address they lived when they were sued and as a result were never served notification. This does not provide recourse in most cases. It is up to the consumer to notify the department of motor vehicles of any address changes. That is the address they will attempt to serve notice.

A judgment will remain on a credit profile 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. This is the key and the big difference between how a collection account affects credit when compared to a judgment. Some states provide for 10 years (California) and the judgment can be renewed for another ten years! That is a total of 20 years that a judgment can chase you in California.

A person who holds a judgment can enforce it several ways. They can garnish wages, secure bank and other asset accounts, lien property etc. Most?judgments can be negotiated, especially if they are aged. It is a common practice for collection agencies and attorneys for the plaintiffs to do a property search around the time of expiration to see if anything shows up. If so, they put a demand in for the money and negotiations are needed to prevent a lien for the full amount on the property.

All lenders require judgments be paid before sale or refinance can take place. It is customary to allow borrowers to pay the judgment out of refinance proceeds.

Popularity: 4% [?]