What is a *judgment?
A judgment is the final decisive act of a court in defining the
rights of the parties. It includes a decree and any order from which an appeal
lies. The proper term is Court Judgment. Other terms commonly used include,
default judgment, civil judgment, foreign judgment, and judgment proof.
What are Default Judgments?
The term "default" refers to a "failure to act" and the term
"judgment" (often misspelled as judgement) means the "final disposition in a
legal proceeding". When dealing with credit and debt collection issues, default
judgments are typically granted because the debtor fails to act; usually by not
paying a debt and then by failing to show up in court. When you fail to
appear in court, the judge usually grants the collector a default judgment.
If you receive a court appearance notice DO NOT ignore
it! The only way to protect yourself is to appear in court and present
the judge with your side of the story. Go to court prepared to show your good
faith efforts in resolving the issue or, in asking for relief in the case of an
expired statute of limitations.
If you receive a notice that a default judgment has been issued
against you, and you were not aware of the court date, immediately go to the
court and request copies of all the paperwork. Look for any mistake or
misinformation such as an old or wrong address. If you find something wrong
contact an attorney and ask for a rehearing. If you can show that you were not
given due process, the judge might just overturn the judgment and then require
the collector to file the case properly. Even better is if the debt has expired
and you mention the expired statute of limitations, the judge might even
dismiss the case.
Reverse Judgments:
This term actually
means to "overrule" a lower court's decision. When debt collectors win a
default judgment, it's possible to have it overturned, overruled, set aside and
vacated. These terms simply mean the default judgment is removed and is no
longer binding.
In order to have a default judgment overturned, you'll need to
prove that the judgment was granted without you being given due process. This
generally means you were not able to appear in court for various reasons and
therefore, not able to properly defend yourself. Obtain a copy of ALL court
documents concerning the default judgment and look them over for any mistakes.
Pay close attention to address, notification procedures, dates and names.
If you can prove that you were not properly notified or that
some emergency prevented you from appearing in court, request a rehearing also
called a motion to vacate judgment.
Foreign Judgements:
It is possible for a
foreign judgment to be brought against you and for it to be enforced! The
United States has international agreements with several foreign countries they
and the US honors each country's judgments. Enforcing a child support judgment
is a good example. Also, the term foreign judgment can be used when describing
a judgment from one state that someone is trying to enforce in another state.
For example, a judgment rendered in NY can be domesticated (moved) to Arizona
and enforced.
Judgment Proof:
You may be considered
"Judgment Proof" during periods of unemployment or while drawing disability pay
or disability retired pay. Also, if you have no assets such as home, car, land,
and other big-ticket items. In other words, you have no money and can prove it!
Never ignore a lawsuit just because you are broke or have no
assets! If a debt collector or creditor is trying to sue and you believe that
you are judgment proof, you must respond to the lawsuit as such. Failure to
appear and show the judge why you are judgment proof opens the door for the
judge to grant the collector a "default judgment".
Even though they cannot collect anything from you now, they can
wait many years and try again. Also, the judgment will show up on your credit
report.
Special Note: Judgment-proof is the commonly used term
but a more accurate term would be "execution-proof"! Although creditors and
debt collectors win lawsuits, they still have to collect thus, if you are
penniless you are insulated not from judgment but from execution (collection of
the debt - at least temporarily).
If you lose your "judgment proof" status due to new employment,
the creditor or collector can seek a judgment and ask for a wage garnishment of
up to 25% of your disposable income. Once you're employed again, it's better to
negotiate a reduced payoff rather than risk a court-ordered judgment. The
difference is your credit report will show "debt settled" instead of the more
negative "judgment"!
* The term judgment is often spelled as judgement however, both
terms mean the same thing. Additionally, a court judgment is often referred to
as a "civil judgment"; these are also the same thing.
