What is a Judgment?
A judgment is filed against a debtor after losing a law suit to a creditor. According to credit education site Carreon and Associates, "about 80 pecent of judgments are awarded in error" due to faulty service or a technicality. After the judgment is filed, the collection agency then reports it to the credit reporting agencies, who then drastically reduce the FICO score as a result. A judgment can seem frightening and overwhelming to many, but it's not a good idea to ignore papers in the hopes that the trouble will go away. Once a negative verdict is filed, the problems are just beginning for the debtor.
Longevity of Judgments on a Credit Report
After the judgment is filed, it can stay on a credit report for an eternity. Depending on the state, the black mark remains on the report for 12 to 20 years, with an option for the creditor to renew the negative strike at the end of that time. Even if it's paid, a notation of "Satisfied Judgment" stands on the report for another seven years after settlement. Carreon and Associates states, "Be sure to always check your [statute of limitations] for debts if you have been served because if it is expired (and many debts expire in 4 to 6 years) you can use that to dismiss the case."
Cleaning Up Judgment Damage
According to the Bad Credit Advisor blog, the best way to remove a judgment is to get it dismissed or vacated in court. This is a lengthy process that can be done without a lawyer, although it's usually advisable to retain one just to be safe. Often, the presiding judge has made a procedural error, or the plaintiff filed incorrectly. Once that happens, "your attorney, or yourself if you choose not to have one, must prepare a Motion and Declaration to Vacate Judgment and an Order to Show Cause, and do it accordingly with rules of the state, whichever it is in your case, of civil procedure," the site states. After this is done, the credit agencies will require written proof that the judgment was settled or dropped, and will adjust the report accordingly.