If you have ever gone a few months behind on debt you may have received a letter or a call from a collector threatening to pursue a judgment against you if you don’t make a payment as soon as possible. If this falling behind is new to you a judgement can sound very scary and depending on the debt that you owe, the state that you live in, and the creditor you have it can be a serious problem. So what exactly is a judgment?
What Is A Judgement?
A Judgement in regards to your to your debt means that a creditor has taken you to court for nonpayment and a judge has ruled that you do indeed owe the debt. A judge when making a judgement will also detail the ways the creditor has to recoup payment on the debt?
After a Judgement How Can a Creditor Get Payment?
Well, there are several different ways a creditor might be able to recoup payment from you after a judgement and these depend on the laws of each individual state. Some states, for instance, will allow a creditor to garnish your wages where the court will instruct your employer to deduct a portion of each one of your paychecks every single month until the debt is paid in full. Other states might be able to levy your bank account where they will be able to just take all the money you have in your savings and checking until the debt is paid. Some states have strict consumer protections and only allow the creditor to continue making calls and have the judgement placed on your credit report.
How Will a Judgement Affect My Credit?
Well a judgement will have the same impact as other serious derogatories such as a lien, a repossession, or a foreclosure. This means the negative can stay on your credit report for up to 7 years. While a judgement will bring your score down the simple truth is that a judgement doesn’t just happen over night. This means you have had months of non payment and collections that have already seriously brought score down.
How Can I Improve My Credit After A Judgement
Well, fortunately, at CRE Credit Services our program works to help rebuild credit for those who have had judgements and other credit mishaps. Our program can help to get the derogatory marks removed and help to establish new positive credit so that you can be back on your way to enjoying low interest rates and qualifying for purchases like a home or car.