A person or company can take legal action against you in court. If the judge rules in their favor, a civil judgment is entered against you. Not answering the lawsuit at all — meaning you chose not to defend yourself against the allegation — can also result in a default judgment against you.
A “judgment” in civil cases is simply the court’s formal decision about a legal dispute. It includes details about the case and the reason for the court’s decision. It also includes the obligations or amounts owed by the judgment debtor to the judgment creditor. The judgment is filed with the court clerk and entered into the public record. It remains there until you pay the judgment.
In the meantime, if an employer, landlord, or lender runs a background check on you, the judgment shows up as a matter of public record. Understanding how a civil judgment affects you and the legitimate options you have to avoid paying it can help you move forward in the most painless way possible.
Understanding the Legal Repercussions
A common misconception about money judgments is that the court automatically collects the payment on behalf of the judgment creditor. The court orders that you owe an obligation to the creditor and specifies the amount of the judgment. However, ultimately, you’re responsible for voluntarily paying the judgment as soon as the decision is final. If you don’t, then the creditor can try to force payment through post-judgment enforcement actions.
Consequences of Not Paying a Civil Judgment
There are many possible consequences for not paying a judgment. Failing to voluntarily pay the court order can further damage your finances. This is because the balances can go up from additional interest and other possible fines. Also, the judgment creditor can seek out other enforcement methods to collect payment.
For example, as part of collection efforts, a creditor might request a “writ of execution” from the court. This is to initiate a legal transfer of your assets through wage garnishment or through freezing your bank accounts. This can also include liens placed against real property- your home, or enforcing a bank levy. In some cases, ignoring the civil judgment might result in jail time, depending on your state laws.
Legal Ways to Avoid Paying a Civil Judgment
If you don’t want to voluntarily pay the judgment but want closure regarding the debt, you can approach a court judgment in a few legal ways. Before moving forward with any alternatives, it’s always advisable to seek experienced legal counsel from a debt relief attorney. They can provide help deciding which is best for you.
Appeal the Judgment
You can file an appeal if the appeals deadline has yet to pass. You must believe a legal error was made during the civil procedure to file. In doing so, you’re asking a Court, usually in the Court of Appeals (a higher court), to review the judgment. They’ll review the initial judgment’s details, evidence, and outcome and reverse the lower court’s decision if there are appropriate grounds. Otherwise, the original order of judgment will stand.
Legal Grounds for an Appeal
As the appellant (i.e., the person applying for a judgment reversal), you bear the burden of proof that a legal mistake was made in the lower court. You must prove that a legal mistake was made and that it was also consequential to the final decision.
You don’t have legal grounds for an appeal if you simply want to present your case to a new judge. This holds true if you wish to present new evidence or witnesses, or merely think the decision is unfair.
Process for Appealing a Judgment
To appeal the judgment, you must file a “notice of appeal” with the superior court. File this by the specified deadline and pay a filing fee. Then, you must provide the court with the documents and arguments you want included in the appeals record. This is the critical information the appeals judge will review for legal errors made by the lower court.
You’ll also need to prepare a brief explanation of the error and justify why you believe the judgment should be reversed. If you want to prepare an oral argument to clarify the argument in your brief, you can also do so. Case law should be included to support your arguments, so again, this is something that a layperson could be challenged with and requires a strong attorney to assist with managing an appeal for a debt collection lawsuit.
Be aware that filing an appeal doesn’t absolve you from satisfying the judgment. In many cases, unless you request a “stay” for the judgment to formally postpone it, it is still in force during the appeals process.
Negotiate a Settlement
Although the judgment states how much you owe the creditor, there may be situations where it’s worth working through the matter and resolving the debt through settlement. A debt settlement attorney can assist you with the process so that you don’t end up paying more and the case is resolved correctly. Not all debtors can afford a lump-sum payment to fulfill the satisfaction of judgment. If you’re in this situation, you may be able to negotiate a settlement for a percentage of the judgment amount or set up a payment plan. This option can act as a middle-ground to avoid having collection efforts escalate and avoid the appeal process, especially where you have no grounds to appeal a judgment from a debt collection lawsuit.
How to Propose a Settlement
First, understand how much you owe after the judgment has been entered. Review the judgment details carefully to identify how much the court states you owe, including any fees or interest. You can contact the creditor or their debt collection attorney directly to try to work through a settlement for a lower lump-sum amount or get on a payment plan. The creditor might be inclined to negotiate since you’re voluntarily seeking a mutually agreeable settlement instead of simply not paying the judgment altogether.
Explain your proposed settlement amount and your plan for paying it.
Tips for Negotiating with Creditors
- Work through a debt settlement attorney. Lawyers specializing in debt settlement know about collection laws that you might not be aware of and how to get rid of the debt quickly.
- Know your rights under the Fair Debt Collection Practices Act (FDCPA). For example, a consumer collection agent for creditors can’t harass you to collect on the judgment during certain hours and methods.
- Secure a written settlement agreement. Before making a payment, always request a written agreement of the agreed-upon debt settlement details, and any promises made by the creditor should be in writing.
File for Bankruptcy
Another option, if you can’t afford to pay a civil judgment, may be to file for bankruptcy. Bankruptcy is a Federal court process that offers relief for debtors who can’t pay their obligations. In certain cases, this can include money judgments from civil cases. Bankruptcy should be a last option since it carries many consequences. In addition, you have to qualify for bankruptcy as it is not automatic or a right.
In some cases, it’s also an opportunity for creditors to get at least some monetary satisfaction, depending on the bankruptcy Chapter filed.
Understanding the Bankruptcy Process
When filing Chapter 7 bankruptcy, a debtor’s assets, like real estate, can be liquidated and the proceeds are directed to the creditor. All remaining eligible debts in the bankruptcy case, which might include the civil judgment, might be discharged once the bankruptcy case is closed. There is no repayment plan under a Chapter 7 bankruptcy.
Conversely, Chapter 13 bankruptcy adjusts your debts by creating a three- to five-year payment plan while letting you keep certain property and assets.
Pros and Cons of Bankruptcy
The advantage of bankruptcy is that it offers you a clean slate and can help you avoid paying all or a portion of a civil judgment. Certain bankruptcy processes, like Chapter 7, are also a relatively fast way to discharge a debt.
However, bankruptcy has many downsides. The first is that you have to qualify for it. For example, to be eligible for Chapter 7, you must satisfy the means test based on your monthly income, the amount of debt you have, and family size.
Filing fees for bankruptcy can also be costly, and the process involves a time-consuming amount of paperwork. Your credit and score are adversely affected for up to 10 years after your bankruptcy case closes. Additionally, you’re beholden to the bankruptcy laws of your jurisdiction, so the money judgment might or might not be dischargeable through bankruptcy.
Get help navigating a civil judgment
There are different ways to handle a debt-related civil judgment. This includes filing an appeal to negotiating a settlement with the judgment creditor and more. However, whether these alternatives help or worsen your situation for many years to come depends on how you approach it. If you’re facing this predicament, seek appropriate legal advice. Doing so is critical to ensure you’re informed about how each debt resolution option works. It can help you understand its impact on your overall finances, credit, and budget. Working alongside debt relief attorneys to find a manageable way to resolve your debt can offer peace of mind in an already stressful situation. Submit this short contact form for a free phone consultation. You can also call our award-winning debt assistance law firm today at (866) 890-7337. Your information is always confidential, and nothing is ever shared.
