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

Incoming search terms:

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. 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 debt problems....
  2. 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 a good chance that you could sue that agency. But what about that friend of yours who owes you five bucks? Do you have to grant them thirty days to refute the claim? Obviously, you do not....
  3. Wait A Minute. How Long Will This Stay On My Credit Report? Part 1 Your credit history. It could be your best friend, or your worst enemy. Usually it's like a nosy mother in law coming to visit for an extended period. You know that she's coming, and that's always bad news, but you are too afraid to ask or even consider how long she will be staying. Even though that was the worst analogy ever, read on to see how long negative marks should remain on your credit history!...
  4. Getting Out Of Debt Has Never Been Clearer Being in a serious financial crisis can be very stressful and difficult, especially if you don't have enough knowledge to handle your situation. Many people are in this situation because of the current global financial crisis. Because of this there quite many programs and companies that has appeared offering different services to help you pay off your debt....
  5. Does Bad Credit History/defaulted Payments Affect Getting A Working Visa In The Usa? I am planning to go to US in April. I will be in credit however have missed payments etc and have a bad credit history. Will this affect me getting a visa? Incoming search terms:bad credit affect getting us bank job (2)USA…...
  6. Christian Debt Counseling Provides Better Debt Settlement If there is one thing that we must avoid in life,with everything we have, it would be debt. It is wise to never get yourself in that position with credit cards and other financial services companies no matter what the amount is. The reason for this is that just about every form of debt comes with interest. And mind you, interest does not sleep or take a break. It does not go hungry, does not have a family to feed and all it does is accumulate and gain and gain....
  7. See How Credit Reports And Scores Can Distress Your Finances The initial action to take when attempting to repair your credit is to obtain a copy of all three credit reports from the most important credit reporting bureaus. By law, you are permitted to a free copy from each of the credit reporting companies one time each year and it is also feasible to get a report that contains all three for a fee....
  8. How Does Store Credit Cards Affect Your Credit Rating? How Does Store Credit Cards Affect Your Credit Rating? Are you shopping from a same store each and every time? Are you tempted to go for the store credit card to get some advantages like special discounts cards, birthday rewards, shopping points,…...
  9. How To Get Free Credit Report If you want to buy a $20,000 car over a 48-month period, then you should expect to get a 6.5% interest rate and pay $2,700 in interest over the loan's lifetime. However, if you have a low credit score, then your interest will be 11% or higher, meaning you'd pay $4,800 in interest for that same car! Finding free credit repair services is so critical because it sets the price you get on mortgages, auto loans, school loans and credit card interest rates. Who wouldn't want the best deal?...
  10. A Few Credit Restoration Steps To Build up Credit Rating Your credit score is the single most important factor that decides your financial domination. The procedure of re-building your credit rating after having suffered a employment loss or some sort of family crisis may seem unfeasible, but the truth is starting from scratch is more simpler that you think. The difficult part when it comes to starting over and raising your credit rating is maintaining a constant payment regimen with the credit reporting agencies....

Tagged with:

Filed under: Credit

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