Last Updated on May 11, 2022 by Fair Punishment Team
The Basics
A civil judgement is when a court has issued an order against you, normally for repayment of debts. While it might be obvious, when you borrow money from a lender – there are rules in place to pay it back. In fact, it’s a legal obligation.
You might become in arrears with a lender such as a loan provider or credit card company. Other than that, you could drop into debt with providers such as energy, telecommunications, mechanics and services or medical bills.
Whatever the case, if you’ve failed to meet your financial repayment obligation – normally, the creditor will contact the debtor and try to arrange some sort of repayment plan, or ask why you’ve failed to pay.
There could be a variety of reasons why they have not received payment such as administrative errors, credit card problems with their systems, a change of address that has caused billing address errors, a change in bank account without contact or even fraud.
If it’s simply due to a lack of funds, the easiest way is to agree to a repayment plan or debt management plan, such as a debt consolidation loan. If the creditor has tried to get in contact with the debtor and received no answer, they will normally begin legal proceedings to try and reclaim the debt.
When A Civil Judgement Is Issued Against You
When a civil judgement is entered against you, you’ll be invited to court. If you fail to show up at court, even if you are innocent – you’ll be found guilty in your absence.
You’ll also be found guilty if the creditor wins their case against you. The civil judgement, if granted, can be used against you in order to reclaim the money that the creditor is owed. They might receive it back through a deduction in your wages, attachment to property or property liens.
The laws on this change from State to State, so you’ll need to find out what the specific law is on what a creditor can claim back from you where you live.
Judgement Against Property
When we’re talking about property, it can refer to anything from money to personal property – items that you own. For example, the creditor could take your car. If however, they apply for property liens – the creditor could take specific property… like your home.
What Exactly Can Be Taken To Sort Out The Judgement?
We all must follow the law, and this is no exception to creditors. Some property items can be made exempt (perhaps your home or the home’s furnishings) but this is subject to your State and their determination.
However, items that aren’t exempt can be used in the recovery of debt. This could be in the form of:
Garnishing Wages
If this is decided, your employer must be informed and they will then hold back some of your payment received each month, to be made payable to the creditor until such time as the entire debt and costs are covered.
There’s slight protection on this by the Consumer Credit Protection Act, which caps the amount taken to cover a monthly payment at 25% of their weekly wage. Some States may take their own judgement on this and set the percentage lower.
Garnishing Of Non Wages
You can’t garnish wages if you’re not earning wages! This could be because you’re unemployed, self-employed, retired or unable to work long-term due to injury or illness. However, you might still have your bank account garnished. Things like veteran payments, social security payments and disability payments can not be garnished – and some States will vary on further restrictions.
Property Liens
If your property has a judgement against it (only if you own it), then if you decide to sell up – the debt must be cleared with some of (or all) of the proceeds. Some States decide this is the correct step when it comes to a civil judgement.
Property Levies
This is where valuable items of yours can be used to offset the debt, such as jewelry, entertainment technology or other luxury items.
Avoiding A Civil Judgement
Probably the best way to avoid a civil judgement is to ensure you’re not living outside of your means. If you’re earning less than your bills (including credit card and loan repayments) then perhaps it’s unwise to take out further lines of credit.
If you’re ever in serious financial trouble, it’s a good idea to speak with someone in your State that can advise you of the best steps forward. If you have multiple debts, it might be wise to seek out a debt consolidation loan at a rate that suits you.
If you’re successful here, your credit will not be as largely affected as it would be if you have a civil judgement issued against you, or have to arrange a debt management plan. Even though, since 2017, civil judgements don’t appear on your report, the score will still be affected.
If you’re ever in financial trouble by missing a payment or think you might miss a payment – you should immediately contact the lender and talk to them about your financial situation. Most lenders are very understanding and have departments in place for these types of problems. They should be able to work with you to determine a plan to get out of trouble.
If the problems have arisen from an administrative error or through fraud, the best way to deal with it is to catch it early, by keeping a close eye on your credit report – and frequently.
Post Judgement
A creditor can pursue you for the debt for between 5 and 20 years depending on the State. If you cannot afford to pay the debt at all, the creditor may drop the case, postpone action or force you into bankruptcy. Of course, the latter is the worst possible place you can end up financially, but sometimes it’s the only option to reset and start again.
It’s possible to challenge and/or reverse a civil judgement – but it’s not easy without plenty of evidence and legal know-how. It’s best to seek out an experienced attorney who works in the financial field.
