The data held in credit reports can have a significant impact on your ability to take out new finance. Most lenders will offer loans or credit cards based on certain criteria related to a credit report. Some employers may make offers of employment conditional on the data held in a credit report. If a credit report contains a judgment, it could make it very difficult for you in these circumstances. Learn more about what is required when getting a judgment removed.
What is a judgment?
A judgment refers to a court decision stating that a person suing somebody is judged to be in the right. This gives that person the legal right to take further action to recover monies owed or to seek damages, according to the nature of the case. The judgment will issue the details of what the defendant is legally obliged to do as a result of this, which could include a fine. If somebody files a judgment against you, it is still possible to get the judgment vacated (dismissed). Vacation is a legal term that applies to a situation where the judgment is deemed void.
What are the options?
There are two main courses of action that you may take.
Vacation. To get the judgment removed entirely from a credit report you will need to get the decision vacated. In this case you would have to submit a filing to the court called a 'motion to vacate.' This will indicate the legal grounds under which the judgment should be vacated from the credit report.
Release. Release refers to the process by which a judgment on an individual's credit report is deemed to be satisfied, meaning that the defendant has settled all the obligations that he or she was committed to under the terms of the judgment. A released judgment will still appear on your credit report, but may satisfy some lenders and employers, in that you have fulfilled your obligations.
How do you get a judgment vacated?
You or your lawyer will need to submit paperwork in order to process a motion to vacate. The regulations around what has to be done may vary from state to state so it is important to choose a lawyer that is qualified in the state concerned. Each state will have separate rules about the valid reasons for filing a motion to vacate, too, so it is important to ensure that the appropriate grounds are selected. Once the paperwork is complete, the motion will need to submitted to the court that issued the original judgment. The court will then notify you of the date when the case will be held. It is also your responsibility to notify the original plaintiff, although some courts will do this automatically.
What happens if the judgment is vacated?
If the court rules in favor of the motion to vacate, then you will receive court documents confirming this decision. You should then send copies of this document to any relevant collection agency or credit bureau to ensure that the judgment is removed from their records.
What is the 7-year rule?
The statue of limitations refers to the period of time that the holder of a judgment has in order to collect on the judgment. In the case of a judgment the record will stay on your record for up to seven years. This is regardless of when the judgement was paid, or indeed whether the judgment was paid at all. After seven years, therefore, any judgment should be removed from your credit report.