If you’ve ever been involved in a lawsuit that went to trial then you are probably familiar with the term ‘judgment.” A judgment is a formal decision made by a court following a lawsuit. In the world of credit, it’s not uncommon for creditors or debt collectors to sue debtors for nonpayment of their debts and obtain judgments.
Judgments are considered public records, which means anyone has access to view those court filings. Credit reporting agencies commonly obtain judgment records from courthouses and place them on consumer credit report cards. These judgments are allowed to remain on consumer credit files for seven years from the filing date.
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How to Remove Judgments
Unlike most credit report entries, judgments can be successfully removed well before seven years has passed, but it’s going to take some work and luck on your part. Here’s the lowdown on judgments, their status and how best to get them removed from your credit reports.
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After a judgment has been filed against you it will start to accrue interest, just like any other debt. I’ve seen judgments double in value because of this so-called post judgment interest. If you have a judgment filed against you, the “winner” of the lawsuit—formally called the judgment creditor— is going to attempt to collect. They can do so a number of ways including wage garnishment, so you’re going to want to take care of the judgment as soon as possible.
You can pay the judgment. You can attempt to negotiate a settlement for the judgment amount. You can file bankruptcy and discharge the judgment. Or you can do nothing and let the judgment creditor forcefully collect. Regardless of how it’s done, once the judgment has been paid a “satisfaction of judgment” will be filed with the court.
Normally the judgment creditor will file the satisfaction but you can also file the satisfaction. Once the judgment is satisfied your credit reports will be updated accordingly. And while a satisfied judgment is better than an unsatisfied judgment, it’s not going to be removed from your credit reports any sooner than if it were unpaid.
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A vacated judgment is different than a satisfied judgment. When a judgment is vacated it’s as if the judgment never existed. This is different than a satisfied judgment, which simply means the judgment has been paid.
As long as the vacated status is clearly filed with the courts you should be able to get the judgment removed from your credit reports. The credit reporting agencies do not maintain the reporting of vacated judgments, or at least they’re not supposed to do so. Reporting a judgment that has been vacated is like saying something happened that didn’t actually happen and you can make the argument that it’s incorrect credit reporting.
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In some cases having a vacated judgment removed is as simple as disputing the item with the credit reporting agency and providing a copy of the “order to set aside” the judgment with a letter (look up a sample letter to remove judgement from credit report). In other cases it’s not as simple and requires you to press the issue with the credit bureaus. In fact, more than one class action lawsuit has been filed against some of the credit bureaus for not removing vacated judgments. Experian appears to be the only credit reporting agency that publicizes its policy to not report vacated judgments on its consumer credit reports.
Having your judgment set aside or vacated is the only way to possibly have it removed from your credit reports sooner than the “seven years from date filed” date.
Although judgments can only remain on credit reports for seven years from the filing date, it doesn’t mean they’re simply going to go away at that time. In most jurisdictions a judgment creditor can have the judgment re-filed or “revived” before it expires, which varies state by state. That means it’s going to get a new filing date and, you guessed it, cause it to be re-reported by the credit reporting agencies for another seven years.
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