A debt collection judgment is a court order that you owe the creditor money. The judgment is the final decision in a collection lawsuit. It gives the debt collector the power to garnish your bank account and wages. It has a negative impact on your credit score. And in some cases, creditors will exercise their post-judgment power to seize some of your personal property and have it sold to pay the debt. Having a judgment against you is an unpleasant situation to be in and is one of the main reasons why it’s so important to answer the summons and complaint. If a debt collector has a judgment against you, here are some of your options:
Consider vacating the debt collection judgment
If the judgment was obtained by default, you may be able to bring a motion to vacate the judgment. This will give you a chance to defend yourself. Think of it as a do-over. But you’re only able to get a debt collection judgment vacated in very limited circumstances. A consumer lawyer can help you decide if a motion to vacate is right for your case.
Negotiate a settlement or payment plan
If a motion to vacate the judgment is not appropriate in your situation, your options are pretty limited because the time to dispute the debt has passed. In many cases, your best choice may be to try to negotiate a settlement of the debt collection judgment. That may be the only way to avoid the stress and inconvenience of garnishments. Good deals are hard to come by after judgment because you’ve lost most of your leverage. But if you can demonstrate a significant financial hardship, or have a lump sum of cash available, you may be able to get the creditor to knock a decent chunk of the balance off.
If all else fails, bankruptcy may be your best option
If the judgment is for a significant amount of money, or if you have multiple judgments, your best choice may be bankruptcy. Bankruptcy puts an immediate stop to garnishments and other collection activity and will allow you to wipe out or manage all of your debts.
Remember that the FDCPA applies even after the judgment is entered
The FDCPA is a federal law that regulates what debt collections can and can’t do when collecting. If a collection violates the FDCPA, you have a legal claim against them for up to $1,000 in statutory damages, plus provable out-of-pocket and emotional damages. The debt collector also has to pay your attorney fees and costs. A viable FDCPA claim is also great leverage to get a debt collection judgment resolved favorable. So keep a record of all the conversations you have with the debt collector and save all letters and voice mails from them. And if you think that a debt collector has violated the FDCPA, talk to a consumer lawyer right away.