What happens if a judgement is made against you

At the very least, the judgment appears in your county's property records, so when you sell or refinance your property, the title insurer will require that the judgment be paid in full from the proceeds.

If your debt is exceptionally high, it could help to confer with a bankruptcy attorney. Get referrals from your state's bar association, your professional network, and other attorneys you know and trust. Bring copies of your debt records and any relevant communication to leave with the attorney.

Judgments can disrupt your finances and your job, and they can prevent you from obtaining insurance, renting an apartment, or gaining security clearances.

Therefore it is well worth the effort it takes to attempt to negotiate a settlement before things get into court and to defend any lawsuit filed against you. Consumer Financial Protection Bureau. Texas Law Help. Federal Trade Commission. The Florida Bar. Virginia Law. County of Napa. Marshals Service. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads.

Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Also, federal law limits the amount that a judgment creditor can take from your paycheck. Some states set a lower percentage limit for how much of your wages can be garnished. To learn more about how wage garnishment works and the limits in your state, see our Wage Garnishment articles. Often, a judgment creditor will attempt to levy against your bank account to satisfy a money judgment.

The creditor requests that the court issue an order to the bank to freeze the money in your bank account.

If any of the exempt income noted above is in your bank account and those funds are levied, the judgment creditor and the court who issued the levy, must release those funds back to you. If you don't own real estate, a judgment creditor won't be able to place a lien against any real property to satisfy a money judgment. If, though, your financial circumstances should change and you're able to buy real estate, that judgment can attach to the property at that time.

You won't be able to later sell or refinance your property without the judgment being paid. A judgment creditor can try to grab your personal property , like your car or jewelry, to satisfy a money judgment.

To do so, the judgment creditor must first get a writ of execution from the court that identifies the property it intends to take. If a creditor has obtained a judgment against you and seeks to enforce it by taking your cash, or by seizing and selling other property, you most likely can keep at least some of that property by using exemptions.

Often, a judgment creditor won't attempt to levy your personal property because of the time and expense incurred in locating the property and the added expense of advertising and selling the property. Even if you're judgment proof, you usually shouldn't ignore your creditors and debts. Being judgment proof is, in some cases, only a temporary condition. Your financial situation could improve; you might resume working or could inherit some property. If a creditor sues you and you believe that you're judgment proof, it's often a good idea to respond to the lawsuit anyway.

You might have a valid defense to the suit, like the statute of limitations has expired. Also, judgments are valid for a very long time and can be renewed. If your financial circumstances might improve in the future, the creditor could be able to collect at that time. In some circumstances, though, you might not want to respond to the lawsuit. If you agree that you owe the amount claimed in the lawsuit, including interest and fees—and your financial situation won't change—it might make sense to let the creditor get a default judgment instead of paying attorneys' fees and court filing fees to answer the suit.

Before you determine this is the best route, however, talk to an attorney. I can ' t complete my interview as I am incurring new me dical Saying that, I've read that it's moot to pay credit card bills if I tend to file for bankruptcy The first thing to try after a judgment has been entered is to see if the judgment creditor is willing to let you do a voluntary payment plan to pay off the judgment.

Keep in mind that a judgment gives the debt collector additional tools to collect money from you. Since these tools come with a court order, some judgment creditors are hesitant to agree to a voluntary payment arrangement.

After all, they just paid a bunch of attorney fees to sue you and get access to these additional tools. Once a creditor has a judgment , there are three primary ways to try to collect the judgment amount. Judgment creditors can use wage garnishment to receive a portion of your earnings each paycheck. Exemptions limit the amount the creditor can take. Some states like Florida , Idaho , Oklahoma , Maryland , Ohio , and Utah follow federal wage garnishment limits to determine what is considered exempt income.

Other states offer similar exemptions to judgment debtors but add more protections. There is no federal limit as to how much they can levy; state law determines how much a creditor can take with a bank levy. A judgment creditor may also put a lien on all your property, both personal and real.

If you own your own home, that is an example of "real property. If you try to sell the property, you may have to pay off the judgment lien before receiving any of the sale proceeds. The homestead exemption in your state impacts just what this would look like for you. Even though the creditor can't collect their money from you, they can still try to demand payment, which can be irritating to deal with regularly. The ultimate defense to post-judgment collections is bankruptcy.

As soon as you file for bankruptcy protection, the automatic stay goes into effect. The automatic stay is the mechanism that stops all debt collection activity including wage garnishments, bank account levies, the recording of liens, and pending lawsuits.

The bankruptcy discharge is a court order that eliminates your obligation on all of your dischargeable debts, like medical bills, credit card debt, and similar unsecured debt. Student loans, tax debts, and child support obligations are examples of the types of debt that are not always eliminated by a bankruptcy filing.

Public records and your credit report will continue to show the judgment. Additionally, if the judgment creditor records the judgment it may act as a lien on your real estate. Attorney Andrea Wimmer.