What is a Court Judgment?When a creditor exhausts collection attempts directly with a debtor, a court-ordered judgment is often obtained against the debtor. This is the final decisive act of a court in defining the rights of the parties. It includes a decree and any order from which an appeal lies. If you receive a notice that a default verdict has been issued against you, and you were not aware of the court date, immediately go to the court and request copies of all the paperwork. Look for any mistake or misinformation such as an old or wrong address. If you find something wrong contact an attorney and ask for a rehearing. If you can show that you were not given due process, the court might just overturn the decision and then require the collector to file the case properly. It's even better is if the debt has expired and you mention the expired statute of limitations, the court might dismiss the case. The term "default" refers to a "failure to act" and the term "judgment” means the "final disposition in a legal proceeding". When dealing with credit and debt collection issues, default verdicts are typically granted because the debtor fails to act; usually by not paying a debt and then by failing to show up in court. When you fail to appear in court, the decision is usually granted in favor of the collector. When debt collectors win in court this way, it's possible to have it overturned, overruled, set aside and vacated. These terms simply mean the decision is removed and is no longer binding. This term actually means to "overrule" a lower court's decision. In order to have a default court decision overturned, you'll need to prove that it was granted without you being given due process. This generally means you were not able to appear in court for various reasons and therefore, not able to properly defend yourself. Obtain a copy of ALL court documents concerning the court decision and look them over for any mistakes. Pay close attention to address, notification procedures, dates and names. If you can prove that you were not properly notified or that some emergency prevented you from appearing in court, request a rehearing also called a motion to vacate. You may be considered "Judgment Proof" during periods of unemployment or while drawing disability pay or disability retired pay. Also, if you have no assets such as home, car, land, and other big-ticket items. In other words, you have no money and can prove it. Even though they cannot collect anything from you now, they can wait several years and attempt again. The court decision will immediately show up on your credit report. Judgment-proof is the commonly used term but a more accurate term would be "execution-proof"! Although creditors and debt collectors win lawsuits, they still have to collect thus; if you are penniless you are insulated not from the decision but from execution (collection of the debt - at least temporarily). When your situation changes due to new income or assets, the creditor or collector can seek collection and ask for a wage garnishment of up to 25% of your disposable income. Once you're employed again, it's better to negotiate a reduced payoff rather than risk a court-ordered wage garnishment. The difference is your credit report will show "debt settled" instead of the more negative "judgment"!
Credit Statute of Limitations
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