How a Judgment Affects Your Credit

Many people know that unfortunate circumstances in life, such as divorce, health issues, job loss or death, can result in financial hardship.  All of a sudden, accounts go unpaid, collectors call, negative listings appear on credit reports, and sometimes, lawsuits are filed.

You are a defendant in a lawsuit
Whether the default was for a credit card, auto loan, a medical bill or another personal obligation, if you were sued DO NOT IGNORE THE LAWSUIT.  After receiving a summons, as the defendant, you must inform the court of your intent to defend.  Whether you seek legal representation from an attorney or intend to represent yourself  “pro se“, you must attend the court hearing.

Default Judgment
When you fail to appear in court on the hearing date to defend the lawsuit, a default judgment will be entered against you.  This means that the judge ruled against you in non-criminal court.  You will be required to pay the damages or judgment amount.

Judgments are public court records, which means anyone has access to view the court filings.  Credit bureaus commonly obtain these records from the courthouse and list judgments on the consumer’s credit file.  Although judgments can only be listed on credit reports for 7 1/2 years from the filing date, after that time period, judgments could be re-filed, or revived, before it expires, causing a re-reporting by the bureaus for another 7 1/2 years. This varies from state to state.

Do not Ignore a Judgment
If there’s a judgment entered against you, you must address it. Even if it’s a mistake and the debt doesn’t belong to you, you will need to take action to get it resolved to avoid negative consequences on your credit report.  Judgments allow for the plaintiff to take steps, such as garnish bank accounts, place liens on property,  and in some states, garnish wages.

You have rights against the debt collector
When a creditor assigns the collection of a debt to a third party collector, the Fair Debt Collection Practices Act (FDCPA) , offers protections from a collector’s abusive collection tactics.  Whether the consumer owes the debt or not, the collector must follow the law.

Seek Legal Help

Flitter Milz is a consumer protection law firm that represents consumers against debt collectors.   Contact Us if you have received collection calls or letters.  You have rights against the collector and may be able to bring a lawsuit against the collection agency or collection law firm for violation of your consumer rights. There is no cost to you for the legal review.