Judgment Day

I’ve warned that there are dangers in building up credit card debt. If you rack up a large bill and a lender is tired of waiting on you to pay up, he/she could take you to court. Here, you might come across strange terms like “tort” or “estoppel.” The end result of the case, however, is a familiar term.

A judgment is the final verdict of the case. In credit terms, a judgment determines the amount of money owed to the lender, as well as the form of repayment. If you have a whopping debt, the justice system may propose penalties, and you could be paying literally and figuratively.

There are a number of ways a judge can enforce the repayment of a debt. The most common route is wage garnishment. If this is the judgment, you had better have a reliable source of income. Whenever you receive a paycheck, a percentage of it will go toward paying the debt. This is the simplest form of repayment, and it is implemented to prevent further personal financial strain. If you are given a wage garnishment, you must furnish a pay stub every once in a while so the judge can determine the percentage that will go toward the debt payment. Believe it or not, the court system wants to help you. A garnishment does not mean all of your earned wages will be taken. Typically, between five and ten percent of your salary will go toward paying off the debt. Just think of it as another tax, and always supply an accurate pay stub when the judge orders.

If you are inaccurate in providing how much money you are making, further legal action could be taken. Seizure of property is another way to make you pay. Because property has monetary value, a judge may call for its seizure to pay for the debt. Jewelry, your car, even your home could be used to pay the debt.

Another way to make you pay is by issuing a lien. This is less harsh than actual seizure of property in that it is temporary. The creditor is given the right to possess your property from a lien, but he/she cannot sell your property. It will be in possession of the creditor until your debt is fully repaid, so you are literally trapped.

In regards to your personal credit, a judgment will appear on your credit report, ultimately lowering your score. The Fair Credit Reporting Act allows a judgment to appear on your report for up to seven years, but if it goes unpaid, the judgment may stay even longer. Don’t take a loan you can’t afford, or a judgment day could be in your future.

David Pilley

David Pilley

David Pilley is a May 2010 graduate of the University of North Carolina at Chapel Hill, with a B.A. in communication studies and a creative writing minor. He is a native of Raleigh, North Carolina.

He played clarinet for the Marching Tar Heels in 2005 and 2006. He also volunteered for STV, the student-run television station at UNC-Chapel Hill, in the spring of 2010. He shot video, wrote scripts, and acted for “Off the Cuff,” UNC’s longest running sketch comedy show. He has the rare distinction of having lived in a dorm all four years of his undergraduate college career. He was also on Franklin Street on the night of April 4, 2009. His future plans are to pursue a master’s degree in journalism and to one day work for the media as a sports journalist or broadcaster.

Being one of eight children, David realizes finance is an important topic to everyone, regardless of his/her knowledge of the subject. His interests are in personal finance, budgeting, and savings.

In his spare time, David enjoys watching sports and standup comedy, as well as doing crossword puzzles and writing in the first person. He also thoroughly enjoys trivia and, one day, hopes to participate on the game show Jeopardy!, where he will try to break Ken Jennings’ 74-game win streak.
David Pilley

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