You were sued by a creditor and ultimately lost the case. Now you have a judgment staring you in the face. The judgment says that you are legally required to pay your debt and any associated court costs. Now what do you do? Well, there are only three ways to settle things.
Failure to utilize one of the three methods in a timely fashion could result in your judgment going to a collection agency, like Salt Lake City’s Judgment Collectors. You do not want that to happen. Going to collection could ultimately result in wage garnishment, property liens, and more.
Here are the three ways to settle your judgment:
1. Pay What You Owe
The first and most obvious option is to pay what you owe. Doing so results in legal satisfaction. In other words, the creditor will file a Satisfaction of Judgment with the court, certifying that you have paid the debt. The document settles the issue once and for all.
It is not uncommon for debtors to worry themselves sick over paying judgments they can’t afford to make good on. What many fail to realize is that creditors are generally willing to negotiate. They would rather get something than nothing at all.
This is not to say that you should seek to take advantage of your creditor by purposely offering less. Rather, it is simply to say that there is some leeway if you want to satisfy a judgment quickly so that it doesn’t go to collection.
2. Have the Judgment Vacated
You can vacate a judgment by successfully appealing to the court. Vacating sets the judgment aside so that you can contest the result of the original litigation. Note that your chances of a successful vacate order are greater with default judgments than contested judgments.
Under a contested scenario, you already answered the lawsuit and appeared in court. You lost and the court entered the judgment against you. Such cases are hard to contest a second time. Getting a judge to vacate the judgment is highly unlikely. However, unlikely doesn’t mean impossible. A lawyer might still want to give it a shot.
A default judgment is entered when a defendant does not show up in court. In such a case, your failure to appear means you did not contest the lawsuit. You might have a compelling case for vacating the judgment if you can prove valid reasons for contesting it now.
Vacating a default judgment requires explaining to the court why you didn’t show up for the original hearing. Get past that hurdle and your chances of success go up.
3. Have the Judgment Discharged
Your third option is to have the judgment discharged through bankruptcy. This is not the ideal way to go, and some states limit the ability to settle judgments in this fashion, but it could be an option in your case. Filing for bankruptcy should result in an automatic stay of the judgment. Upon full case review, the bankruptcy judge might discharge it all together.
The one thing to be aware of here is that bankruptcy will probably not remove any judgment liens placed on your personal property. The court may prevent judgment collectors from continuing to pursue action against you, but existing property liens will remain intact. You will have to settle your debt before those liens can be removed.
There are only a limited number of ways to settle a judgment. If you are the defendant in such a case, you can either pay what you owe, seek to have the judgment vacated, or have it discharged through bankruptcy.