How Can I Get a Judgment Settlement Lowered?

Settling a judgment takes time and patience.
Settling a judgment takes time and patience. (Image: Digital Vision./Digital Vision/Getty Images)

A judgment is a court-ordered repayment of debt you have defaulted on paying. Judgments are not only detrimental to your credit history, but also commonly used legal lien instruments against personal property, allowing the creditor to have an ownership interest in your home or garish your wages to collect on the debt. When a judgment settlement is too much to pay, it is possible to negotiate a lower settlement with the judgment holder in some cases.

Write a letter to the judgment holder offering to settle the judgment for less than the amount granted by the court. Validate your offer to settle by providing circumstances of why you are unable to pay the full amount.

Wait 30 days for a reply from the judgment holder. The creditor or collection agency will reply within this timeframe either accepting or countering your offer. If they do not accept the offer, send a new letter with a new proposed amount, increasing the amount from the initial offer. In the second letter, reiterate the reasons why you remain unable to pay the balance. It may be necessary to repeat this several times before both parties reach an agreement.

Get a cashier’s check or money order for the settlement balance agreed to by the creditor. With the payment, send the signed copy of the agreement from the judgment holder to accept less than the balance of the judgment.

Make a copy of the letter and money order or cashier’s check, and mail it to the court that granted the judgment holder the settlement. When the creditor confirms receipt of payment, the court clears the judgment from your record.

Tips & Warnings

  • Send copies of the release of judgment to the credit bureaus to make sure their information is up to date. Always keep your original judgment paperwork when filed. You need to refer to this in order to settle the judgment. Give the creditor 30 days to confirm payment of the settlement arrangement. Follow up with them during this time and request a copy of the settlement releasing the judgment that they send to the court handling your file.

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