To begin with, a credit card judgment is a court order acknowledging that the consumer owes a debt and which allows the creditor the right to seize assets to repayment the debt owed. This normally comes about when a credit card cardholder falls behind on their monthly minimum credit card payments and has virtually ignored repeated requests from the credit card provider to bring the account current.
Idealistically speaking, before getting to this point, it would be best to contact the card provider so things do not get out of hand. Credit card providers are often willing to work with a cardholder to either arrange a payment plan or to arrange for a pay off in full for a reduced debt amount.
If a credit card provider feels it will get nowhere with you regarding your credit card debt, it may sell your debt to a collection agency. If so, you will then have to negotiate with the collection agency as the credit card provider has removed itself from the equation. Most collection agencies do not want to file a law suit against you as it is time-consuming and costly. They would much rather work with you to settle the debt, either through a lump sum payment or by arranging monthly payments.
If your credit card debt is brought before a judge, you have the legal right to plead your case by appearing before the judge. A judge will consider certain extenuating circumstances. Extenuating circumstances may include proving that the seizure of the assets will be seriously detrimental to you or proving that the debt in question is not yours.
Additionally, not all assets may be seized and a judge may determine exactly which assets may be taken. A judge may also order that money be taken from your bank account to pay the debt , may set a ruling to garnish your wages (depending upon state law), or may even order the filing of a lien upon your real property, if you own any.
Your credit score will be severely damaged if you obtain a credit card judgment. Also, it will be extremely hard to be approved for any credit products. Your credit history can carry this albatross for up to seven years.
As if this wasn’t enough, this credit card judgment can also affect your chances of future employment or advancement in your current job. Also, searching for reasonable rates on home and car insurance may be affected.
It is best to pay the credit card debt off as quickly as possible once the judgment has been issued. Once you have paid this debt off, you should try to contact the credit reporting agencies to attempt to have the debt removed in its entirety or to request this entry be revised to a “paid” status, at the very least.
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