Credit Card Judgments and Their Impacts on Your Score

A credit card company typically seeks credit card judgment after you default on a credit card account. The credit card company does this by filing a lawsuit against you as the debtor in civil court so they can try to get a credit card debt judgment. The credit company is entitled to use any debt collection method against you to ensure they are compensated if they get a judgment from a court. The judgment is a court order that indicates its findings. 

There are several court judgments, including:

● Default judgments 

This is a judgment issued when the debtor fails to acknowledge and respond to a lawsuit served to them by the debt collector. The judge will resolve the case without hearing your side.

● Vacated judgments

This refers to judgments that have been annulled by the court, providing the debtor with the chance to defend them better.

● Summary judgments

This is a judgment that does not involve a trial. The court will solely decide its decision by application of the law. 

● Renewed judgments

This refers to the process where judgment creditors file a request with the court to renew their judgment against the debtor before 10 years are over.

Judgments on a credit card report

Over the years, civil judgments from credit card judgments have shown up on your credit card report without any action on your part. If a creditor won a judgment against you in a court of law for a debt you owe, the judgment would typically show up in your credit card report right under the public record section. 

However, new public record policies have been formed against this act. The only information allowed in the public record section includes an individual’s name, address, date of birth, and social security number.

The negative impacts of a judgment on a debtor’s credit scores

It is quite alarming to realize that a large population is currently battling judgments on their credit card scores. Legally, a judgment obtained from the court by a creditor remains on the record for seven years until the debtor pays back the debt in full or the court intervenes by granting a rescission. 

The following are negative impacts of a judgment: 

● Judgments may affect your ability to qualify for loans or credit from lenders. They might find out that you have an outstanding judgment against a previous creditor but thus lose trust in you. 

● Judgments impact your ability to open a new credit account

● If not paid, the amount owed continues to increase due to interest, leaving you with the possibility of an even more significant debt.

Three ways of removing judgments from credit reports

As much as judgments can’t affect your credit card scores, it is advisable to seek ways to remove them from your credit reports so you can avoid dealing with liens and garnishments. 

● File an appeal to the court: If you, as the debtor, appeared in court and lost the case, you can appeal the verdict. The court shall then decide if they want the decision reversed. An appeal is quite difficult, but in the right circumstances, the results will be in your favor.

● Pay the amount in question: instead of fighting the verdict, you can look for ways to pay off the debt, such as requesting a payment plan or paying the whole amount off and waiting for the judgment to fall off.

● Settle with creditors: The creditors might be in a position to let you pay less money than the total amount owed to avoid having to deal with the hassle of collecting money. This also happens in cases where they are afraid that the debtor might declare bankruptcy.

Maintain your creditworthiness 

Now that judgments no longer appear on your credit report, it doesn’t mean that there is room for you to slack on making sure your credit score is in a good place. Failure to do so will still taint your credit, causing setbacks. To avoid these issues, make sure that your debts are paid on time and that you satisfy any pending debts. 

When you need any help responding to or dealing with a credit card debt lawsuit, consider seeking the advice of an attorney from Warren & Migliaccio. We help debtors protect their rights, ensure they understand the possible solutions available, and even make debt collectors seize on calling you. We understand dealing with court proceedings and debt collectors can be overwhelming, but you don’t have to do it alone.. Call (972)205-9750 today.