Having credit card judgements is a situation that no one ever plans on being in. I bet you wish that you could simply erase credit card debt. It can be scary because you feel a loss of control and are unsure what will happen next. Here is what you can expect if a lawsuit has been filed against you.
Try to Settle the Debt before it is Issued!
The best advice for dealing with credit card judgments is to avoid them all together. They will seriously harm your credit and can follow you around for years. Although the debts are unsecured, the creditor can still use means, like a wage garnishment to collect their money.
If you have been served with a law suit, the best thing to do is to contact the creditor and try to arrange a settlement. Many times, they are happy to dismiss the case in exchange for money. Chances are, they will accept far less than the amount you owe them. You may even want to hire a debt settlement attorney. Things are going to be much better for you all around if you are able to reach a settlement prior to the judgment being issued!
After the Credit Card Judgment is Issued
Obviously, if you are reading this it may be too late – a credit card judgement may have already been entered against you. That does not mean all is lost. Here are some strategies that you may be able to use to eliminate the judgment from your credit file.
Dispute the Debt
Disputing legitimate debts is not nearly as effective as it once was, but it still works some time. Court houses are not known for their speed, so you may get lucky and they may fail to respond within the 30 day time frame. If that happens, they must remove this information from your credit file.
Negotiate with Your Creditor for Dismissal
If disputing the debt is not successful, you may be able to negotiate with the creditor to have the judgment dismissed in exchange for money. While there will still be a negative impact on your credit, it is far better than if the judgment was simply showing paid.
Motion to Vacate
If the above methods are unsuccessful, you may want to consider filing a motion to vacate, which makes the credit card judgement void. You can do this if you believe that you were not properly served or if for some reason you are exempt. You can also get a motion vacated if you requested validation of the debt and the creditor failed to respond. It is generally a good idea to spend a few hundred dollars with an attorney to do this for you unless you are comfortable handling this youself.
Understand the Statute of Limitations
One thing to keep in mind is that all debt has a statute of limitations. Most people think that it is seven years, because that is the length of time that an account can stay on your credit file. This actually is not the case. The amount of time an account can be reported to the credit bureaus and the length of time debt can legally be collected have nothing to do with one another. Every state has different rules, so it is important that you understand the laws where you live.
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