What Is a Credit Card Judgment?
Credit card judgments are one of the worst financial black marks that someone can receive on a credit report. The judgment forces the consumer to repay debts that are extremely difficult to repay. The judgment is a legal determination that a debt is owed and must be repaid.
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Features
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A credit card judgment is applied to debtors who have consistently refused to make payments on their debts. When a loan is granted, the company that loans the money has the option of suing through the court system to receive that money if the loan recipient does not make payments.
Function
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A credit card judgment is essentially a court telling a debtor to repay the debt. When the court becomes involved, it is usually possible for the lender to use liens or wage garnishments to retrieve the money owed to them.
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Significance
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A credit card judgment damages a consumer's credit ratings. It tells the financial world that this person does not pay back debts. When this happens the credit score of the person is significantly lowered. It becomes very hard to obtain new loans after a credit card judgment.
Time Frame
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Usually, the court issues a specific time frame that the debtor has to pay back the money that is owed. This time frame varies case by case. Some courts will allow the debtor to pay an amount smaller than the original debt if it is paid quickly.
Considerations
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It is best to avoid a credit card judgment. If a company files an intention to earn a judgment, it is advisable to try to work directly with that company outside of court. In many cases, the company will settle rather than completing the expensive court process.
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