Here’s the situation. You owe some creditor a bill. You want to pay but you just can’t. There simply isn’t enough money in your budget to pay your living expenses and all the rest of your bills top of it all. So you pay your living expenses and let the other bills go.
That’s how it begins.
Later, the creditor starts to call you and write nasty letters trying to collect the money. But you still don’t have the money to pay. You try to explain the creditor that you simply don’t have it. You try to work with the creditor, and ask for some kind of a payment plan that you can afford.
The creditor refuses to work with you at all.
They want all the money and they want it now. You still don’t have it so you don’t pay. You can’t. It’s impossible.
Eventually, the creditor turns the debt over to a lawyer who files a lawsuit and gets a judgment against you.
A judgment – what does that mean to you?
A judgment is simply a determination by a Court that you owe the money and the creditor is now free to use the court system to collect from you.
If you own real estate, the judgment can be filed against your house.
If you have a job, the judgment can be used to garnish your wages.
If you have a bank account, the judgment can be used to wipe out your bank account.
Like a credit card debt, judgments carry interest.
That means they get larger and larger as time passes.
Frequently, we see judgments to start out small, but because of the interest on them, they get larger and larger and eventually groe to several times the original debt.
If that judgment was recorded against your real estate, you can’t sell the real estate without paying off the judgment.
Judgments also show up on your credit report
When the judgment is on your credit report, other creditors can use this as a reason to lower your credit limits on credit cards.
This is happening more and more with the tightening of the credit walls.
Some people think that once a judgment has been filed against them, there’s nothing they can do to it rid of it except pay at. This is not true.
Bankruptcy can wipe out a judgment.
In fact, most judgments will be wiped out in a bankruptcy.
It doesn’t matter how old the judgment is, and sometimes it doesn’t matter if the judgment has been recorded against your real estate.
In many cases, we can remove them from real estate.