What Do Outstanding Judgments Mean For Your Credit (& Can You Remove Them)?

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There are several remarks that may impact your credit score negatively like foreclosure, or bankruptcy. Without regularly screening your credit report to verify the  accuracy thereof, items that negatively impact your credit score can be listed on your credit report unnoticed.

If you have regularly missed payments to a creditor, they may consider seeking legal action to enforce your debt obligations. How a debtor should navigate this scenario depends on various factors, including:

  • Attempting to resolve problems individually, or use a credit repair company to handle the problems.
  • The debtors credit score (Better if in good standing).
  • Surrounding circumstances of the debtor.

What Is An Outstanding Judgment?

A judgment occurs if a creditor has successfully taken legal action against a debtor's account. Once the obligated payments are missed for consecutive months, the creditor can initiate legal proceedings to have a court order the debtor to pay the debts. This is called a bad-debt judgment.

If a debtor has been taken to court by a creditor and a judgment is awarded in favor of the creditor, the debtor will be liable for the existing debt, interest on the debt and any legal fees associated with the case and the account.

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How Long Does A Judgment Stay On Your Credit Report?

Once a judgment has been passed down and reported on your credit report, it will remain there for 5-7 years before it is no longer reported.

What To Do If You Have A Judgment On Your Credit Report?

Before 2019, you would have to get the judgment rescinded to have it removed from your credit report. Judgements will remain reported on your credit report for 5-7 years. A new ruling has simplified the process by requiring debtors to show proof that the judgment has been paid up, payments include:

  • The original debt
  • The interest on the debt
  • Any other fees due. (Legal fees)

Once the judge has ordered the repayment of the debt, prioritize the repayment schedule issued by the court. If possible you could try paying more than what is required to speed up the process and have the remark removed from your credit report sooner.

Bottom Line

Outstanding judgements have a drastic negative impact on a consumer's credit score once on their credit report. If this happens it is best to stick to the repayment schedule. Repayment

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