What is a Debt Collection Judgment?

If you have a long-standing debt, such as failure to pay a credit card bill, eventually you may find yourself being threatened with legal action leading towards your debt going into judgment. This is a last resort option that gives companies the right to sue you for the amount that you owe, once the debt has gone to collection and they have made multiple attempts to collect it in other ways. The company’s attorney will send you a letter giving you a certain amount of time to repay the debt before you are summoned to court. Normally you will have about 30 days to respond.

If the process continues, a court date will be assigned, providing you with an opportunity to defend yourself before a judge delivers a ruling that specifies the steps that will be taken to ensure the debt is repaid. If you do not follow through, the company can go back to court and ask to take more drastic steps, such as seizing your property or other assets.

How can I avoid going to judgment?

Many times, companies do not want to go through the expense and hassle of taking you to court. They may threaten to do so in order to get you to pay up on your own. It is very important not to ignore communication from the company that you owe money to – you need to respond to them and suggest a repayment plan or discuss your options. Most companies will be satisfied if you can, “determine what monthly amount you can afford and send it to the agency, certified with a return receipt, with a written statement that you will pay that amount each month until the balance is paid.”1 You can always seek your own legal counsel if the situation seems to be getting out of hand or you are not able to come to an agreement.

The important thing is to demonstrate that you are actively seeking ways to resolve the issue so they feel that a court order is unnecessary. Going to court may put your other assets at risk and make it extremely difficult for you to regain good financial standing in the future.

1 http://www.bankrate.com/brm/news/debt/20031107a1.asp

Laura Gutmann

Laura Gutmann

Laura Gutmann is currently a PhD student in Education at the University of North Carolina-Chapel Hill. As part of her studies, she hopes to focus on creating better resources and training materials for teachers.

Previously, she worked as the Vice President of Programs for Junior Achievement of New York. She was responsible for reaching 95,000 K-12 students per year with financial literacy, workforce readiness, and entrepreneurship programming. Her team organized events for schools across the five boroughs of New York City, facilitating positive relationships between classrooms and the community. Ms. Gutmann has extensive experience building curriculum focused on life skills, and has partnered with dozens of corporations to train their employees to become volunteer role models.

Ms. Gutmann also created resources for both students and educators during her time as a kindergarten teacher in the South Bronx. She first entered the classroom through the Teach for America corps, and went on to receive her M.S. Ed. in Early Childhood from Bank Street College. She has developed web resources, professional development sessions, and parent workshops, and served as a graduate-level writing tutor and resume coach.

Before becoming a teacher, Ms. Gutmann studied Public Policy at Duke University, where she received her B.A. in 2002. She worked in Durham Public Schools as a reading tutor and photography teacher. She also spent time doing research for the American Federation of Teachers, and served as a consultant for the Wake Education Partnership.

Ms. Gutmann currently resides in Chapel Hill with her husband and her dog, a poodle named Noodle.
Laura Gutmann

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