Debt which is sent to collections will adversely affect your credit score. However, if your creditor seeks and is awarded a judgment, your credit score will be affected even more drastically.

Your creditor is sending a clear signal that it is through playing games if you are served with a Notice to Appear in court for a judgment proceeding. You will have 30 days from being served to object to the filing. You can have the case dismissed if you can prove that the debt is invalid.

Some creditors may threaten to file a law suit but are not serious. However, going to court will be the kiss of death for your credit score and, therefore, should be avoided at all costs.

An “unpaid” judgment will be shown on your credit report for 10-12 years. At the end of this 10-12 year period, if the judgment remains unpaid, it can be renewed. A paid judgment can be shown on your credit report for up to 7 years from the date paid.

It is wise to contact your creditor to arrange a lump sum payment or a payment plan. However, do this only after checking your state’s statute of limitations laws to determine if your debt falls within or outside of the laws. If your debt falls within the statute of limitations, you are still obligated to pay the debt and you should try to negotiate payment. Adversely, if your debt falls outside of the statute of limitations laws, you no longer owe the debt though, if you offer to make payment, you will start the clock running all over again.

If the court issues an official court order for payment of the debt, your credit score will suffer drastically. This negative mark will not show up on your credit report if you contact your creditor and negotiate a settlement prior to the entry of judgment.

Offering to negotiate a settlement is the best solution for all parties. Typically, creditors do not want to go to court and will accept a portion of the amount owed just to bring the matter to a close. If you do not have a lump sum to offer as payment, you can always attempt to negotiate a payment plan. If your creditor is not “in the mood” to consider any offers, you might think about calling the lawyer handling the case for your creditor.

Your credit report will show the debt as “legally void” if the judgment is dismissed. This is much less damaging than a “paid judgment,” which can be shown on your credit report for seven years from the date paid.

It would be best to negotiate a settlement which includes a complete deletion of all negative information from your credit report related to the transaction. If you and your creditor are able to agree, be sure to obtain a written agreement with both of your signatures. You should always remember that, once the court becomes involved, negotiating opportunites become slim to none.

You might consider hiring a good consumer credit attorney. It may cost you a little bit, however, you may find that, by having an attorney handle the negotiations, you may save money as well as minimize the damage done to your credit score.

The Way to Stop Midland Credit Collection Agency for Good. Free 19 Page Guide. Fast, Easy, and Free. Limited quantities available at www.MidlandCreditDebt.com.

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. Consumer Protection Law Defends Oregon Collection Agency Consumer Protection Law Defends Oregon Collection Agency In the previous time, if, for instance, you were an Oregonian consumer, with a number of poor credit card balances but were able to withstand until the statute of limitations passed, you were more or…...
  2. Eliminating Credit Card Debt – If You Are Not Doing It Yourself, Debt Settlement Costs Too Much Debt Settlement, debt negotiation, and debt consolidation, are terms used by firms who charge fees to negotiate lump sum settlements with credit card companies. Regrettably, these companies do a much better job of eliminating your worries with a false sense of security than they do of eliminating your credit card...
  3. Does Debt Negotiation Work? Can I Settle my Debt? Reasons why Debt Negotiation is Difficult With the bad economy, limited income opportunities and evaporated real estate equity, many people are having difficulties paying off their debts. An increasing number of families are forced to make a difficult choice of either paying…...
  4. Exactly Who Is Trying To Get Me To Pay Up? Exactly who is trying to get me to pay up? The Fair Debt Collection Practices Act was written in the 1970s and provided many protections for consumers. There are strict rules and regulations that a collector has to abide by, and if any of these regulations are violated, there is...
  5. Does Debt Settlement help to Consolidate my Debt? Are they the same thing? Is Debt Consolidation Effective in Debt Settlement? Debt consolidation is a process of settling your debt. Although very popular, most people ask if it is an effective method even for people who are already swimming in debt. The straightforward answer to this…...

Tagged with:

Filed under: Credit

Like this post? Subscribe to my RSS feed and get loads more!