Statute of Limitations on a Judgment
Judgments occur when one party wins a lawsuit in court against another party for an unpaid debt. A judgment gives the winning party, known as the "judgment creditor" additional collection rights against a debtor. The judgment creditor, however, cannot enforce the judgment against the debtor indefinitely.
Other People Are Reading
-
Time Frame
-
Each state allows judgment creditors the right to legally enforce their judgments for a limited amount of time. This time period is the statute of limitations for judgments. Judgment statute of limitations can range from seven years to ten years or longer depending on the debtor's state's laws.
Misconceptions
-
Once a statute of limitations expires, the judgment creditor can still collect the amount that the debtor owes, but cannot use legal force to involuntarily extract payment from the debtor. For example, a judgment creditor may have the right to garnish an individual's bank accounts and wages, but once the statute of limitations on his judgment expires, he loses this right.
-
Considerations
-
The amount of time during which a judgment may be legally enforced in a given state also influences the reporting period for the judgment on the debtor's credit report. The Fair Credit Reporting Act dictates that the credit bureaus may report judgments for seven years or for the full enforcement period in the debtor's state if it exceeds seven years.
-
References
Resources
- Photo Credit gavel image by Cora Reed from Fotolia.com
