
If you ever wind up in front of a judge in a courtroom, it probably won’t be a pleasant experience — especially when you are the one being judged. I know plenty of cases involve bad decisions or lapses in your own judgment, but one way you can end up in front of a judge is by simply not paying your bills.
When you have unpaid debts and you keep ignoring calls from creditors trying to collect on them, they may sue you. In that case, a real judge will place a judgment against you, which is a court order for you to pay your debt.
A judgment is a court order stating that you owe money to a creditor or debt collector and must repay it.
If a judgment sounds like something you want to avoid, you are absolutely right. Even though I haven’t had any judgments myself, I’ve done plenty of research on how they work and what you can do to avoid them. In the event you find yourself facing a lawsuit from a creditor, I have some tips to help you navigate the process.
How Judgments Work
We’ve all received charges on our credit card statements that caught us by surprise. Sometimes it takes a minute to remember that slab of stromboli you purchased from a street vendor at 1:00 AM.
But if a judgment is issued against you, the debt in question shouldn’t be a surprise. Creditors only turn to lawsuits to collect debts when they’ve exhausted other means of collection and need assistance from the legal system.
Legal Implications
When a judgment is issued against you, then the court has ordered you must pay the debt in question. A debt judgment includes the amount of money you owe a creditor, including interest.
When Lenders and Creditors Obtain Judgments
People don’t sue each other every time they have a disagreement. Lawsuits can be expensive and drag out over a long time.
Similarly, lenders and creditors don’t seek judgments as a first step to collect debts from you. They don’t want to waste time and money if they don’t have to, either. They’ll first reach out to you through the mail, email, or over the phone to attempt to collect your debt.

Lenders may seek a judgment to collect the money they believe you owe them when you ignore their requests for payment. Watch your mail for correspondence notifying you that a debt collector has sued you to collect a debt.
Courts schedule a hearing where both you and your creditor or debt collector will have a chance to share details about the issue. After weighing the facts presented, the presiding judge will issue a judgment if they rule in favor of the creditor, which means they’ve agreed that you owe them payment.
Types of Judgments
If you only learn one thing from British musician Phil Collins, and, let’s be honest, we’ve all learned a ton from the diminutive drummer and pop star, I hope it’s that we always need to hear both sides of the story.
People can observe the exact same thing and come away with wildly different interpretations of it — that’s perspective for you. It’s why the U.S. legal system allows for defendants and plaintiffs to state their case during legal trials.
Not responding to a lawsuit, or failing to show up in court when ordered to can lead to the creditor asking the judge to issue a default judgment.
A default judgment is a court ruling issued when one party doesn’t respond to a lawsuit. I believe you should participate in the proceedings to explain your side of the story before a legal ruling is made against you.
On the other hand, if you and your debt collector agree to terms of payment, you can submit the details of the agreement to the court. The judge will review that information and issue a consent judgment if he finds it satisfactory. A consent judgment ends the lawsuit and establishes a course for you to pay your debts.
What a Judgment Could Mean For Your Finances
Dealing with a lawsuit and its expenses can give you a headache. But unlike a headache, a judgment isn’t a temporary nuisance — it can cause long-term harm to your financial health.
Credit Report Damage
If a lender sues you for not paying a debt, you’ll have time to address the issue quietly. But once a judgment occurs, it’ll be a matter of public record.

The good news is that judgments don’t go on your credit reports anymore, and they don’t impact your credit score. But that doesn’t mean they don’t affect your ability to access credit.
Lenders will certainly see all the late payments leading up to the judgment. If something’s a matter of public record, that means anyone can access it, including lenders.
So when you apply for a loan or other credit product, you could be turned down because the lender found a record of your judgment.
Also, know that a skipping of payment due dates that leads to a judgment can, and most likely will, ravage your credit score.
Wage Garnishment and Bank Levies
Just because a judgment stipulates you make payment of a debt, that doesn’t mean your debt collector is going to rest easy.

You’ve avoided payment this long, so they might feel that you’ll continue to dodge your financial responsibilities.
Your creditor can request the courts issue a wage garnishment, which directs your employer to withhold some of your earnings and send them to a creditor to pay your debts.
A judge can also allow your creditor to freeze and take money directly from your bank account to pay debts. This is known as a bank levy.
Long-Term Consequences
It sure is disappointing when you spend an afternoon building a sandcastle village at the beach and someone mindlessly runs through it, destroying all your hard work in an instant.

Similarly, it can take a while to build your credit, but careless financial moves can destroy it quickly.
If you have a judgment in your past, lenders may hesitate to extend credit to you. If they do offer you a loan, the terms might be unfavorable.
That’s why it’s essential to pay your debts on time or work with your credit issuer to come up with a repayment schedule that’s doable for you.
Ultimately, you want to avoid having a judgment, which is what I’ll discuss next.
How to Avoid a Judgment
Now that you’re familiar with judgments and hopefully motivated to avoid them, let’s investigate how to do that and steps to follow if one is issued against you.
Negotiate with Creditors
You can try to negotiate with your creditor to pay back a lesser amount than you owe. Although it’s not a certainty, and it may come with some credit score consequences down the road, they may be willing to discuss better terms. You’ve probably heard the phrase “honesty is the best policy” — and I recommend being truthful in this situation.
Contact your creditors by phone or in writing and let them know that you desire to pay your debt.
Take time beforehand to figure out how much you can pay. You can propose paying your debt in a lump sum or making monthly payments to chip away at it over time.
When you and your creditor agree to negotiated terms, get them in writing before making your payments to ensure you’re both on the same page.
Respond to Lawsuits Quickly
Review any legal or lawsuit documentation you receive to ensure it’s accurate. If it isn’t, you may be able to have the lawsuit dismissed.
Pay attention to any deadlines or next steps you have. You’ll typically have one month or less to respond to a lawsuit.
Options After a Judgment
Be prepared for what can happen, including possible wage garnishment or bank levy, if the court decides in favor of the debt collector.
The legal system isn’t perfect. Attorneys, judges, and court clerks are people, and people have been known to make mistakes at times. You may be able to appeal a judgment if errors were made during the legal proceedings, but you should consider this an expensive longshot.

You can also try to negotiate payment terms with your debt collector at this juncture, but they may be less willing to go that route than they were before the judgment.
Where to Get Legal and Financial Assistance
Don’t feel bad for not being familiar with judgments and their legal consequences — most people aren’t. Reading this article is a great first step toward learning more about them.
And professionals who specialize in offering legal and financial assistance can further guide you if a creditor sues you.
Legal Aid Services
Facing a potential judgment without being able to afford an attorney can feel daunting. But low-cost legal services can help you without emptying your wallet.
Here are some services worth exploring:
- Community legal aid groups often provide free or inexpensive advice.
- Pro-bono lawyers offer free assistance.
- Law schools may offer fee-free services to their students to help guide them.
Credit Counseling Agencies
Credit counseling agencies are nonprofit groups that can provide guidance to help you overcome credit issues, including dealing with your debt issues before they end up in front of a judge. Search for a local credit counseling agency in your city and seek their help to get your credit back on track.
Financial Education Information
I once heard that anyone who keeps learning stays young. Unfortunately, the statement isn’t literal, or your local library would be a veritable fountain of youth. Still, consistent learning can help us hop over life’s hurdles.
Seek robust resources, such as the Consumer Financial Protection Bureau and BadCredit.org, to learn more about managing debt and the moves you can make to live a judgment-free life.
Be Proactive and Don’t Let a Judgment Wreck Your Credit
If staring down a lawsuit from a creditor sounds scary to you, take comfort in knowing that judgments are usually avoidable. Learning about them and the options available to help you can improve your financial health.
Correcting the mistakes that can lead to a judgment is easier said than done. But if you’re diligent in managing your credit, you can terminate credit mistakes altogether and prevent debt collectors from saying “I’ll be back” to you.