debt settlement

Legal judgments can be unnerving and scary. This is the case with most things we have not experienced before. I hope you are not having to go through this process; however, in the event that you are, you should make sure that you understand the process in order to know what to expect during as well as after the process is complete.

In point of fact, a judgment is the final effort of a creditor to collect a debt owed. Prior to reaching this point, many things have likely transpired. To begin with, you have entered into an agreement with a creditor to purchase an item and pay for the item at a later date, normally through installment payments. Or, alternately, you may have purchased an item using a credit card and, subsequently, owe the credit card company for the funds, or credit, fronted for the purchase of the item.

So, you leave the store with your purchase and eagerly drive home to begin enjoying your new purchase. Everything is wonderful until a month later when you become ill and are unable to work for two months. You return to work confident that you will be able to quickly catch up on your overdue bills. However, it proves more than you bargained for! Your creditor is now calling and writing letters at an alarming rate.

The first step a creditor will normally take is to contact you in an effort to negotiate a plan to bring your payments current. Often, you will find your creditor understanding and sympathetic of your plight. However, as the weeks and months march past, he will likely become less understanding and sympathetic. Your creditor will most likely reach a point where he is tired of using his money and time to try and reach an agreement with you. At this point, he may decide to initiate a judgment proceeding against you in order to obtain payment of the debt owed. A "judgment proceeding" is a legal suit where your creditor will attempt to prove that you owe the debt and will try to obtain a "judgment" against you in order to obtain payment for this debt. (It is important to understand that when you entered into the agreement with the creditor or when you applied for your credit card, you likely gave permission to the creditor or credit card company to sue you in the event that you defaulted on your payments. This "permission" is normally contained in one of the clauses in the contract.)

Anxiety is a good word to express how many people feel when served with legal papers. To not show up at the hearing is a thought which many people contemplate. However, it is best to let this be a fleeting thought and to not dwell on it. Not showing up at the hearing is tantamount to just giving in to your creditor. If you appear, at least you will be able to present your side of the matter. Otherwise, by not appearing, you allow your creditor to win by default and you wind up where you were to begin with, owing the debt to the creditor.

If the case does make it to court and you end up losing, your creditor will be granted a judgment against you for the amount of the debt and you will be served with a Notice of Judgment. This Notice of Judgment will allow you 30 days to pay the debt in full. If the debt is not paid within 30 days, the creditor will be able to take certain actions against you in order to collect the outstanding debt. Some of the legal remedies which the creditor may be able to utilize include garnishment of wages, liens against real property, and seizure of assets.

Your credit score will take a nose-dive if your creditor is successful in obtaining a judgment against you! It is best to contact your creditor early on and try to work out a payment plan. Remember, the only one hurt in a judgment proceeding is YOU!

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