A judgment is a debt that is recognized and approved by the court. This debt can be a service that has been provided that was not paid, or a borrowed amount through various forms, such as a credit card or a loan. This judgment was entered against a party that had agreed to pay for the loan or service. The plaintiff (the party that was owed) filed a complaint with the court.
Notice of this complaint and the date this case will be heard by a judge is delivered in person by an uninvolved party, usually an officer, to the defendant (the party that owes the debt). At the court hearing both parties will state their reasons why this is debt is still unresolved. When the judge finds that the plaintiff has successfully proven their case, the judge enters a “judgment” for the plaintiff against the defendant that owes the debt.
Account Transferred or Sold
When a judgment appears on a credit report most individuals know where it originated from. Resolving this should be handled from the judgment backwards to the original debtor.
- Contact the party that filed the judgment, work out an arrangement for paying this debt. Ask if there could be a settlement reached for smaller dollar amount than what is owed. If so, get documentation of the agreement. If an agreed arrangement is made to a reduced the amount owed and payments are not timely, the agreement may not be honored and the full amount will be expected. It is important to be certain that the financial obligation agreed to is reasonable.
- Once this debt is paid a “Satisfaction of Judgment” should be sent to the defendant. The error that usually occurs is when the defendant does not know or realize that this legal document needs to be recorded with the county. The procedure was a legal means of collection and to finalize the procedure the document needs to be recorded. The courts do not have anyway of knowing the debt was satisfied unless notified. This document is that proof. Another name for this document may be “Release of Judgment”.
- Copies of the legal document, after it has been recorded, need to be forwarded to all 3 credit agencies and any other party that had interest in this matter. For instance, the collection company (if one was involved), the credit card issuer or lender of the debt. Make certain that the account the judgment pertained to is attached to every correspondence you send.