What is a Judgment?

The process of collecting on an unpaid debt has multiple steps for most creditors. Rather than going ahead and taking the debtor to court, creditors usually try to work out a deal with debtors in order to get payment faster. Still, it is important to know the full process creditors take in trying to collect on unpaid debt to know how you should respond.
The first thing most creditors do is send out a notice to the debtors that they have an unpaid debt. They usually give the debtor some time – usually about 30 days – to repay the debt. At that point, if the debt remains unpaid, they usually begin contacting the debtor in order to collect. Neither of these strategies are meant as harassment in order to force the debtor into paying – instead, the creditor is usually just trying to get their money and is willing to negotiate with the debtor. If the debtor does not respond, though, then the creditor may take legal action.

The process of going to a court and obtaining a legal document stating that a debtor owns the creditor some payment is called getting a judgment. What happens is, a creditor goes to court and shows that a debtor owes him money. At that point, the court notifies the debtor, and the debtor must respond. Usually, if the debtor signs stating that the debt is real, then the court will try to get the parties to work out a way in which the debtor can pay the money back. If the debtor does not respond, then the creditor will get a judgment saying that the creditor can collect on the debtor’s wages or property in order to reclaim the debt. This statement, called a lien, usually will prevent the debtor from borrowing more money in addition to helping the creditor collect their money.

Regardless of the method through which the creditor obtains the judgment, if you owe a debt, you will generally have to pay. Whether you sign off that you owe the debt and pay it back, or if you do not sign off on it and they get a judgment to collect on your property, you will pay it back. So, if you are in a situation where a creditor is attempting to begin the process to reclaim the debt, then the best thing you can do is get in touch with the creditor. They generally just want their money back – so if you talk to them and set out a plan through which you will pay, then they will go along with it. Staying in contact with the creditor is the best way to avoid them getting a judgment and collecting on your property.

Graham Billings

Graham Billings

Graham Billings is a senior at the University of North Carolina at Chapel Hill with a double major in Economics and Political Science. He plans to graduate in December of 2009 and then attend law school in the fall of 2010. He is a member of the Economics Club at Carolina, which brings in speakers and hosts events in order to discuss current economic issues and help those who do not have a background in economics become more familiar with it. He is a National Merit Scholar and Dean’s List recipient. He is originally from Greensboro, North Carolina and attended the Early College at Guilford for high school, taking classes at Guilford College. In addition to economics, his academic interests include the legal and political system. He headed the only student-run, high school-level Honor Court in high school and participated in a national model Congress in San Francisco, run by Harvard students, and won awards of excellence for his work on the mock Supreme Court. Additionally, he tutors Carolina students in economics on a volunteer basis.
Graham Billings

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