judge not, lest ye be denied credit

October 30, 2006 8:29 AM

So, I have a 'judgement' on my credit report. In terms of my credit, does it even matter whether I pay, and is there any way to reverse/erase it?

It's from back-rent allegedly owed to a landlord (in another state) from about four years ago. There was a court date and I didn't show up. I did receive a notice of the verdict later on, but there has been no further attempt to collect that I know of.

Everything I've read about judgements and credit reports basically says 'if you have a judgement, you're fucked whether you pay it or not.' Well, okay...if that's really the case, then my inclination is not to pay it.

Is there some way I could get a lawyer and make a deal to pay in exchange for having it removed from my record, or has that ship long since sailed?

Also, there doesn't seem to be a collection agency involved even now. The municipal court is listed as the 'creditor' on my credit report. If I contact them to make a deal, I'm not sure what approach to take, i.e. I assume there's a different set of rules than there is when dealing with collectors or debtors of other types.

Finally, to save some of you some time: morally speaking, I feel no obligation to pay. No remarks made below will change my attitude on that subject.

posted by bingo to law & government (13 comments total)

I have that on my credit report, actually. I didn't pay because I really didn't think I owed it, but the judge disagreed.

I have a service on one of my credit cards where I get a quarterly report on my credit. The last time I got the report, the judgment showed up, but my credit score was higher then before, for other reasons (obviously).

According to the report the reason judgments affect your credit (according to the explanation sheet that came with the report) is just that you have to pay them before you make other payments, not because it means you're more of a credit risk.

But yeah it certainly didn't have a noticeable effect on my credit score. You should order a credit report.
posted by delmoi at 8:51 AM on October 30, 2006

delmoi: Well, I do have a credit report, but I've never seen it without the judgement there, so I don't know how to compare. As far as paying it before other payments, I'm not sure how that would work. I've definitely made a lot of other payments to a lot of other creditors while the judgement has been on my report all the while.
posted by bingo at 9:00 AM on October 30, 2006

I'm not sure about the credit report, but if it's a court judgement, they may enforce garnishment on your wages.
They can force your employer to take 10-25% of your wages to pay off the debt (probably with interest and court charges added). It would probably be a good idea to talk to the court before this comes through your employer.

If you think they can't find you, or you get paid under the table, then you don't have to worry about that.
posted by saffry at 9:08 AM on October 30, 2006

IANOB, but when I got a crash course in credit when I bought a house a couple years aog. One thing I learned: A single judgement, or collection, etc. on your credit report shouldn't weigh it down too much, provided:

-- the judgement or collection is in the hundreds or less, not the thousands;

-- you have plenty of other good credit history, such as old, paid-off auto loans, little revolving credit (such as credit cards carrying balances), good income vs. debt ratio, etc.

For instance, I have a $600+ collection from an old mobile phone provider that I have no intention of every paying. but my FICO score is still in the 'good' range (above 700). YMMV.
posted by M.C. Lo-Carb! at 9:12 AM on October 30, 2006

The judgement is for just over two thousand dollars.

I'm not really worried about them garnishing my wages, considering that they haven't even contacted me, and it's been over three years, in another state. Seems like there will be a chance to discuss before it comes to that, and I doubt they're motivated to go through the trouble. Certainly the landlords themselves, who are slackers extraordinaire, are not motivated to send the calvarly after me. What they really wanted at the time was for me to move out, and I did. I seriously doubt that they ever expected me to actually pay.

...which is why, if there was some way to make some sort of retroactive fix-it deal, they would almost certainly take it. At this point, they probably don't even remember me very well.
posted by bingo at 9:37 AM on October 30, 2006

With a judgment, they can garnish your wages or your bank account at any time they choose. I learned this the hard way when my ex's lawyer, who I had agreed to pay 2k dollars, decided it'd be less bother to just garnish my bank account than send me a bill. If this landlord ever decides to, he can contact your local sheriff and - poof, he's got his money.
Since it's a court judgment, there's really not any room for negotiation. If you offered to pay part of it, it may just remind him that it exists and he can just take it all.
posted by muddylemon at 9:55 AM on October 30, 2006

As far as paying it before other payments, I'm not sure how that would work.

Only really relevant in case of state collections actions or bankruptcy; the judgment against you is a "perfected" claim and so if they wanted to garnish or seize any of your assets, they're free to do so today whereas another unsecured creditor (e.g. credit card company) would have to go get their interest perfected before they could do likewise. In bankruptcy, unperfected interests cannot be claimed. But it sounds like you're nowhere near that stage.

I guess you could try to settle with the landlord for some small-to-medium fraction of the judgment if it was worth that amount to you to improve your credit. As muddylemon points out, though, you don't have much leverage since they could start taking your stuff at any time if they wanted to. In general, it seems like a very bad idea to have an outstanding judgment against you (regardless of your perceived moral obligation) since the creditor could really swoop in at any time and collect on it.

However, if your creditor has sat on the judgment for several years already, and if they continue to do so, there may be some sort of statute of limitation or state laches doctrine that would prevent them, eventually, from acting to collect. But you really want a lawyer to look into this if you're going to rely on that possibility. I will merely point you to this page should you desire more information about it. In the meantime, recognize that, even if it hasn't zinged you yet, this unpaid judgment is a sword of Damocles until you do something about it.
posted by rkent at 10:19 AM on October 30, 2006

I used to work in collections in New York State. A creditor has up to twenty years to collect on a judgment.
posted by Lucinda at 10:59 AM on October 30, 2006

Lucinda: This is not a creditor. And while I work in the state of New York, I don't live there, and the judgement in question was in yet another state.
posted by bingo at 11:07 AM on October 30, 2006

Before you will be garnished, you will be served notice of the garnishment.

If you aren't, it is easy enough to get the garnishment set aside while the necessary hearings take place.

Either way, it doesn't seem like they are really going after the money very seriously, and you will get notice if they start trying to collect.

And yes, deals where payment is made in exchange for removal of negative information do happen.
posted by Sheppagus at 11:10 AM on October 30, 2006

Lucinda: This is not a creditor. And while I work in the state of New York, I don't live there, and the judgement in question was in yet another state.

See, this is why people need lawyers: someone with an outstanding judgment against you absolutely is your creditor - there is zero ambiguity about that. They have a legal right to $2,000 (or whatever) of your money, at any time, and since they have a perfected interest they can use a wide array of tools to get it from you if they're so motivated.

Seriously. If you don't feel you should have to pay this judgment, hire a lawyer with expertise in the relevant state law to figure out your options. He or she can at least tell you the real deal with the local statute of limitations on collections.
posted by rkent at 11:38 AM on October 30, 2006

(You may want to change your user profile, then, since it has your location as "New York, NY".)

Creditor is the term that we always used because we dealt with credit cards, car loans, etc. Once you've got your judgment, the process to collect the money is the same, whether it's landlord/tenant, creditor/debtor whatever. So replace "Creditor" with "Landlord" in my original post, if you prefer.

Should the plaintiff decide at any point in the next twenty years to transcribe the judgment to New York state (which they very well could do, considering you work there), your wages can be garnished (up to 10% of your pre-tax income), any bank accounts you may have can and will be frozen, up to 2x the amount of the judgment (which will accrue interest at the rate of 9%).
posted by Lucinda at 11:50 AM on October 30, 2006

Sorry Lucinda...I guess I should change that to New Jersey, although since I work in NYC, I consider myself located more there than NJ.

Anyway, I guess I'll get a lawyer. I appreciate everyone's concern about garnishments and such, but I would be very surprised if the plaintiff bothered to even find out where I am or whether I'm still alive.
posted by bingo at 12:33 PM on October 30, 2006