Summary: When you're sued for debt, you might not know what to do. You might try to ignore the debt and how it goes away. When that doesn't work, you might find yourself with a summary judgment against you. Is it a good idea to ignore the judgment? Read more to find out what happens if you don't pay.
You've just received a judgment. Or maybe it's been floating around for a while. And it's a lot of money. You might be wondering, “Should I even pay it?”
Read on to find out what happens if a defendant does not pay a judgment.
Find Out What a Judgment Means for You
A judgment comes after someone is sued. Whoever wants to collect money from you (the creditor) will first file a lawsuit, and then, the court will decide what or how you need to pay. That decision is the judgment.
It's usually the amount you owe plus any interest.
As you're trying to figure out what happens if a defendant does not pay a judgment, you may see the word “judgment” combined with other words. Here's a vocabulary cheat sheet to help you through any confusion:
- Default judgment. This is what you get when you don't respond to a lawsuit in time. You do not want a default judgment: The creditor basically gets everything they want. If you don't want to hire a lawyer, there are organizations that can help you communicate quickly and well.
- Vacated judgment. This means the judgment has been wiped from your record as if it never happened. If you think you've been judged unfairly (for example, maybe no one told you about the lawsuit so you couldn't even show up), you can make a motion to vacate the judgment.
- Unsatisfied judgment. This means the debt has not been settled.
- Satisfied judgment. This means the debt has been settled.
- Stipulated judgment. This is an alternative to a full-blown judgment. You and the creditor sign an agreement to settle the debt in a certain way. Maybe it's a smaller lump sum. Maybe it's a payment plan. This is a good option if you are confident you can deliver what you promise.
- Renewed judgment. This means the creditor has re-filed an unsatisfied judgment before it expires.
Avoid a default judgment by filing a response with SoloSuit.
Learn What Happens If You Don't Pay
Unfortunately, only bad things will happen when a defendant does not pay a judgment. A judgment doesn't just ask you nicely until you agree. It basically gives the creditor permission to take the money from you, even if you won't give it willingly.
Your Property and Wages Might Be Seized Over Debt
Here's how it might go: Backed by the judgment, the creditor can request an execution from the court. That gives an enforcement officer (like a Sheriff or City Marshal) the green light to go seize and sell your stuff. They could haul your collector car off to an auction, for example. It sounds invasive, but it's legal.
A judgment could also give a creditor a lien to your property. That means they own it. Say you've been working on selling your house. Either you won't be able to sell it until you pay, or whatever you make from selling the house will first go toward the debt.
Another common way of collecting a debt is garnishing. The court can order your employer to take money out of your wages. They can also pull money directly from your account. The amount will vary depending on what state you live in, and there's a cap so you have enough left to survive. In most cases, VA benefits and Social Security are off-limits.
Protect yourself from wage garnishment with SoloSuit.
You Could Serve Jail Time Over Your Debt
Looking from a new angle at what happens if a defendant does not pay a judgment, here's an especially tricky way they'll get money out of you: putting you into jail.
If the creditor can't legally access your money or possessions, they might instigate a debtor's examination, where they can ask you a bunch of questions. If you don't show up, the court can “find you in civil contempt.” The court interprets your absence as disobeying orders, and you have to pay up or go to jail.
If you choose prison, you'll stay until you pay the bond — which will probably be the amount you owe. Sneaky.
So, don't forget to show up to a debtor's examination! Even if the creditor has done this numerous times — even if you know they can't win — they're just hoping you forget to show up one day.
Your Debt Might Increase with Interest and Fees
Regardless of your situation, whether you're willing to pay or are holding creditors at bay, remember that a judgment will accrue interest for as long as it's active.
Five to seven years is pretty typical, but depending on your situation and location, your judgment may be active for 20 or more years. That's a monstrous amount of interest — not to mention a heavy mental load.
Respond to debt collectors in 15 minutes with SoloSuit.
Your Judgment Will Show Up On Your Public Record
Don't forget that judgments go on your public record. Along with bankruptcy and tax lien, they're one of the types of court actions that have to appear on your credit report. It'll affect your credit score, and people won't be so keen to lend you money.
Judgments can also show up on background checks. If you apply for a job that will pay more than $75,000 a year, your potential employer will have to know.
In some cases, you need only wait for the judgment to expire for it to come off your credit report. But remember that a creditor can revive a judgment if the judgment hasn't been satisfied.
So, you're wondering what happens if a defendant does not pay a judgment. In a way, time is your friend — but only if your creditor is forgetful.
File a response with SoloSuit and keep employers from finding out about your debt.
Know What Happens to Your Judgment When You Pay
The judgment should come off your credit report. And paying the debt is a huge step in rebuilding your credit score.
When you pay, make sure you get the creditor to file a Satisfaction of Judgment with the court clerk. While there, they'll also need to remove any indication that they have a lien on your property.
This is a hugely important step in cleaning up your public record and being free of your debt, both financially and mentally.
If you forget this step and can't get in touch with the creditor later when you need them, you'll have to show a lot of proof to the court clerk that the judgment was paid. It's possible, but it'll be a hassle — so just remember to get the thing filed.
What if the creditor won't do it?
Send them a letter. If they still refuse to file a Satisfaction of Judgment, or they don't respond within the required number of days (usually under or around a month), the court may require them to pay you something.
Say you needed that form for an application, and the creditor's delay made you miss the deadline. A lot of states will require the creditor to cover any damages you suffered because of that neglect.
Compare what happens if a defendant does not pay a judgment to when you do: Once you satisfy the judgment, you have the court on your side.
What is SoloSuit?
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance