Is a Creditor Getting a Judgment Against You?

If you have a judgement against you from a creditor, it can hurt you. Judgments can hurt in three ways:  1) They allow the creditor to use powerful collection tools against you; 2) A judgment can make you rush into bankruptcy at a bad time; and 3) Under some circumstances, a judgment can make it harder to discharge the debt in your bankruptcy.  This post addresses only the first of these three.

Most creditor and collection-agency lawsuits for debt collection result in judgments against those who owe the debts. That’s because the reason for debt collection suits is to legally establish that the debt is owed, which is usually not in dispute. Also, much of the time the debtors are at the ends of their financial ropes and can’t afford an attorney to find out their options or to defend the lawsuit. So judgments are entered “by default”—meaning the deadline for the debtors to respond passed without any action by them, allowing the creditor to get a judgment. Sometimes debtors do not receive notice that a judgment has been entered against them or they receive notice and do not recognize it for what it is. Thus, many debtors do not realize there are judgments against them, especially when nothing apparently happens for months or even years afterwards. And very few people are fully aware of the possible consequences.

Most people know that a judgment gives a creditor the power to garnish wages and/or to levy against bank accounts. But preventing garnishments by keeping your bank account empty and by not being paid a regular wage often are not enough to make you “judgment proof.” For example, a judgment usually becomes a lien against any real estate you own now or will own in the future. That includes not only property held in your own name but also your rights to property held jointly with a spouse, parent, or through a trust or estate. A creditor has other tools available, including getting a judge to order you to answer questions under oath, in writing, about what you own – in New Jersey, this is called an “information subpoena”.

Beyond the direct damage a creditor with a judgment can do to you before you file your case, such a creditor can cause you problems in your bankruptcy case.

If you file bankruptcy quickly to stop a garnishment or other collection activity, you lose one of your most important advantages: the timing of your bankruptcy filing. Much of what happens in your bankruptcy case turns on exactly when it was filed. Not having the flexibility to pick the best timing can, among other things, turn a Chapter 7 into a Chapter 13, can mean a difference of many thousands of dollars, and can turn a straightforward case that meets your goals into a more complicated matter.

The lesson here is, whenever possible, take the time to see a bankruptcy attorney if you have overall financial problems, particularly if you are being sued. Try not to wait until after a judgment has been entered against you.

Photo by Dennis Wong.

5 Responses to Is a Creditor Getting a Judgment Against You?
  1. Melody
    April 18, 2012 | 2:59 pm

    Hello,
    I have a question…A debt collector has told me that a judgement has been entered against me 7 yrs. ago in New Jersey Superior court. I have been out of work for many yrs. and out of state, so I didn’t even know. Capital one bank vs. me. In the letter they sent there is a Docket # (DC), but no Judgement # (DJ). I tried to look up the DC# online(NEW JERSEY COURTS), but it shows no judgement against me. How can I find out if there is a judgement without calling the debt collector??
    TY,
    Mel

  2. jweil
    April 18, 2012 | 3:19 pm

    Hi, thanks for your comment. You should contact a court clerk in the county where the judgment is located and give them the DC number (this is your docket #) and ask them whether there is a judgment against you and what date it was entered. The court is generally your best source of info on this sort of thing. There is no such thing as a judgment # in NJ – you would only get a DJ number if the case had been filed in the Law Division or if the judgment has been docketed in Trenton in an attempt to put on lien on your NJ real property (if any). DC docket numbers represent cases that were filed in Special Civil Part. Good luck. Here is general contact info for the NJ courts: http://www.judiciary.state.nj.us/njcourts-10.htm

  3. Michelle
    June 25, 2012 | 7:30 pm

    I live in the State of MS and learned today I have a judgement against me and they are going to garnish my wages. My employer states this is from 2005, this is the first I have heard of this. Apparently it has been 7 years, can they still garnish my wages? Can I file bankruptcy to stop this?

  4. judgment search
    November 11, 2013 | 2:50 am

    If you collect debts in Texas you better watch out for the Texas Fair Debt Collection Act.

  5. christi clark
    June 2, 2014 | 6:20 pm

    i have a court date this week 06/05 from a debit collector in the $2,500 cash call loan. now owed my a Law firm=collection agancey.
    i tried to make arrangements of $25.00 per month they refused to accept.
    I lost my job after 25 years.
    My new job I’m 1099 contract employee

    questions are
    the judge accept my repayment program, will i have judgement against me

    can they garnish my wages if I’m 1099 self employeed?

    they do have my bank information if i lose in court can they get into my bank account?

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