In the field of debt collection and delinquencies, judgments and judgement risk factors are a very real concerns. These concerns include thinking about: Will a creditor sue and seek legal judgement against me? What type of judgement will it be? Is there anything I can do about it?

Debt collectors must abide by the their state's Statute of Limitations (SOL) for the amount of time to sue a debtor for payments. This means a consumer's first step is determine if the SOL for collecting a debt is over.

If the SOL has not passed, you as the consumer must weigh the risk factor of a judgement when determining if you should pay a delinquent debt. A judgement could allow the creditor to garnish wages or hire an authority to come get your property. However, sometimes it is simply too much time and expense for a creditor to take action against you.

As stated at Credit Info Center: "The risks of judgments, garnishments, and property seizures must be properly balanced against the likelihood that such drastic collection measures will ever happen. The risk, and the decision to take that risk, are entirely yours if you're in such a position."

DEFINITIONS

* JUDGEMENT - a decision issued by a court at the end of a lawsuit. If in the favor of the creditor it not only verifies the debt but can increase the debt by adding interest, court costs, collection fees, and attorney fees an may extend up to 20 years on a credit file. A decision in favor of the debtor makes the debt uncollectible and may include reimbursement of legal costs to the debtor.

* JUDGEMENT PROOF - a debtor has little or no property that a creditor can legally take to collect in the foreseeable future.

* PRE-JUDGEMENT ATTACHMENT - a legal procedure which lets an unsecured creditor tie up property before obtaining a court judgement.

* DEFAULT JUDGEMENT - If a consumer is sued and does not file papers in response to the lawsuit in the prescribed time limit, the plaintiff can ask the court to enter a judgement against the debtor and is an automatic loss of the case. A default judgement can be set aside but this is unusual and circumstances must be notable to justify such a turn.

* LIEN - a lien is a notice that a creditor has attached property. The consumer cannot sell the property without paying off the creditor because the lien makes the "title" cloudy.

* SECURED DEBT Property that is purchased using the property itself as collateral on the loan is considered secured. Credit cards are considered unsecured but tax debt is considered secured.

Creditors from secured debts may be able to obtain a judgement for repossessions. Mortgagors can depose and landlords can evict. Garnishment or taking of wages is an option of any creditor. The decision to sue a debtor is based on the amount owed, the cost of getting it back, and whether there is a reasonable expectation that something can be collected.

If the matter can be resolved with the person making the claim before it goes to court, it will be cheaper. If you lose in court, you will likely have to pay the other side’s legal costs. If you agree that you owe the money but don't agree on the amount, you can try to negotiate the matter before it goes to court. Should you reach an agreement, you will need to submit an agreement as to judgement form in the court, which tells the court that there is no need to have the matter heard.

Some judgments can be fought by challenging their validity. Default judgments at times can be reversed by claiming the debtor was never served or was ignorant of the facts. Before reversal, however, you must back up the claim with facts.

Once a judgement has been issued, settlement may still be an option if the debtor and creditor can come to terms. Often this happens when dealing with a temporary judgement-proof debtor who will have assets freeing in the future. The creditor wants the debt cleared sooner and might be willing to settle, rather than waiting until the assets are free.

Contrary to popular belief, a judgement can be removed from a credit file. This only occurs when the debt has been paid in full, the creditor and borrower have reached an agreement.

Roger Sorensen

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