How to not pay a judgment? Here’s how you can get out of paying a judgment

 When you receive a judgment from the court regarding a debt collection lawsuit, you might think that you are now only left with the choice of following the judgment. People also have a myth that creditors will strip everything similar to what happens in the movies. But that’s not the case every time. However, there are certain redemptions on the state level when judgment is filed. You should immediately think of legal ways on how to not pay a judgment?

Depending on your case and the state where you live, there are certain exemptions that you can avail of if you can’t afford to pay judgments. If you are seeking answers for how to not pay a judgment, then you will be served with every possible way and available course of action.

What judgment means to you

In any debt or credit collection lawsuit, a ‘judgment’ is a final verdict issued by a judge or court when someone is sued. Whoever wants to collect credit from you will first file a lawsuit then the court decides to decide what or how they are supposed to pay. This decision is the judgment.

The verdict will then be added to the public records and the other party will use this verdict as a legal suit against you. The winning party can present the judgment to the town’s sheriff that will give him the power to seize the property and collect the money you owe.

This happens after a creditor files and wins the debt case against you. The party is referred to as ‘judgment creditor’ that means he can take any legal action to bring out the debt from you, the ‘judgment debtor’.  The creditor can recover the debt by setting a lien on your property, asking for a portion of your weekly or monthly wage, and by posing a tax on your account.

If this happens, what options can you avail? Here are some of the options that you can consider when there’s a judgment against you:

  • File an exemption claim
  • Try to vacate a judgment
  • Settle with the creditor outside the court
  • File bankruptcy statement

File an exemption claim

When a creditor attempts to seize your property, house, car, furniture, money, and every other belonging, then it could be a problematic situation similar to what happens in “The wolf of wall street”. Most importantly, if the creditor levies on your property or attaches wages, it doesn’t mean that property is entitled to the creditor. However, if the judgment against you is for unsecured loans, credit cards, or any other consumer debts, then generally you don’t have to worry about losing everything and ending up on the streets.

To claim the judgment, you can request a hearing where arguments can be presented about financial hardship on you if the property is taken. If you missed that hearing, you can request a second hearing but that depends on the circumstances.

Property and homestead exemption

Let’s first explore what is homestead exemption! This exemption is a legal regime used for protecting the value of residential homes from property taxes, creditors, or the circumstances which may arise from the death of the homeowner or spouse. Such laws can be found under statutes and constitutions of the United States and are religiously followed in different states.

You can also list your primary property in the homestead exemption list to get a homestead exemption for your primary residence. This will legally protect you from unsecured creditors that may attempt to take away your property. Check your state laws about homestead laws and see how they work. It can be implied on other belongings including personal possessions, vehicles, or businesses.

Exemptions for wage garnishment

Let’s talk about the exemption for wage garnishment which is explained as a form of wage protection that prevents garnishing creditors from taking income from your wages. The main rationale behind this is that the citizens of the United States should be able to protect wages for paying their living expenses. Each state of the US has exemption laws that can protect your wages depending on the situation.

With regards to your wage, the creditor(s) is only allowed to take away or garnish a percentage of your monthly or weekly wage. They cannot go for all of it. This portion of your wage depends on the number of disposable earnings. Typically the percentage allowed for garnish is not more than 25% of your disposable income but that also varies from state to state.

Try to vacate a judgment

To vacate a judgment means to request the court to set aside the verdict or judgment. If the judge agrees to vacate or delay your judgment, it will hold the creditor to collect the collectibles from you, because the judgment is legally null and void.

A creditor cannot immediately execute any actions until the judge issues the new trial date for a new judgment. Although, it is only possible to vacate a judgment when it is issued by default. Default judgments generally come into existence when the debtor is unable to respond in the given time.

As per Texas Rule of Civil Procedure 320, a judge may set aside a judgment and order a new trial “for good cause”. However, the motions to set aside a judgment should be filed within thirty (30) days, the rule mainly permits losing parties to vacate judgment up to two years if they are not present in the proceedings. Rule 329 of Texas Civil Procedure sets out the procedure for such motions of vacating a default judgment.

File bankruptcy to discharge debts

Only in 2019, 772,646 bankruptcies were filed in the US in a single year. Bankruptcy filing is undoubtedly an extreme move to make, but it’s the only legal step to avoid paying a judgment and remove your debt-paying liabilities altogether.

Consumer debts like credit cards debt or unsecured loans can be discharged by filing bankruptcy. Therefore, if you’re seeking ways to not pay a judgment for payday loans or credit debts, then this option can come in handy.

On the other hand, judgments like criminal penalties, child support, fines, student loans, and restitutions, or fraud debts are certain judgments that you cannot request to discharge from bankruptcy.

The settlement with the creditor

The last option that you can use to avoid paying judgments may not completely take you out of your obligations but it can certainly lower the total liability of debts that you have to pay. For instance, rather than paying the whole demanded money in the complaint by the creditor, you can negotiate to settle for a favorable amount that is acceptable for both parties. It may give the creditor to have his money back rather than chasing you for the rest of his life for the whole payment. This option is often agreeable for many creditors in many unavoidable circumstances.

How to pay off after a settlement is reached?

After both parties agree on an amount, you should request for the agreement in writing, and in that same document, it should be written that once the amount is paid off, the creditor will file a “Satisfaction of Judgment”. This is a document signed by the creditor that the payment was received. Avoid paying any money unless the written document of final settlement is received from the creditor. Of course, you don’t want to be chased and harassed by the creditor after some time again to pay the rest.

Concluding remarks!

If there’s a judgment against you, there are possible ways to avoid them legally. Based on your case and the laws that your state legislates, you can try the options discussed above to exempt, avoid, and minimize the judgment against a credit collection lawsuit. Moreover, to shun any possibility of getting hooked by unauthorized creditors, it is always a better option to consult a lawyer who knows everything about the judgments and debt-collection lawsuits.

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