If a judgment appears on your credit report, there are several approaches you can take.
If you have never been served with the lawsuit, have your attorney file a motion to vacate judgment with the court.
After the court grants you the motion (assuming the time to file such a motion has not run out), send a court-certified copy of the court decision to all the credit bureaus that have recorded the judgment immediately.
1.
If you have already received a judgment and you have been served, but perhaps improperly, you can still negotiate your way out of the judgment.
The negotiation will involve two aspects: a) Call the creditor and inform them that you have been served improperly with the lawsuit (you can only make this claim if you did not appear for the trial and a default judgment was entered against you), but you are willing to settle and pay a portion of the claim.
After you come to an agreement on a dollar amount for settlement, you will have to stipulate to the fact that the creditor has served you improperly.
Next, have your attorney file a motion to vacate judgment based on defective service, with the agreement by the creditor not to go to court to contest the motion.
Before the motion is filed, however, the creditor must be paid the agreed-upon settlement amount.
b) Have your attorney file the motion to vacate judgment for you.
Make sure, however, that you are within the time allowed in the statute of limitation to file such a motion before you begin.
Some folks advocate the fact that when a petition is filed to vacate a judgment, there is no time limit.
I would seek advice of your attorney in your state before accepting this theory.
After the court grants the motion, have the court clerk certify several copies of the motion so you can mail a copy to each of the credit bureaus, along with a cover letter stating that you want the judgment removed from your file.
They have to remove the judgment from your record immediately.
2.
Another alternative is to pay the judgment and make sure the bureau records the judgment as "Satisfied" on your report.
You can then explain away the judgment with a consumer statement.
You may explain that you fought the lawsuit purposely for a legitimate reason, you respect the court's final decision and satisfied the judgment promptly.
Keep in mind that this is the less desirable of the alternatives.
Technically speaking, a decision maker of credit cannot decline you for credit approval when your credit report shows judgment satisfied.
Because, it might have been a defective piece of merchandise that you couldn't get resolved and the only way was for the creditor to sue and accept settlement.
No one can determine their own personal reasons about a judgment settlement IF, they were never a part of the law suit.
Kind of like "chastising your neighbors son" because he knows some bad kids.
So, if push comes to shove, you have rights and you might have to exercise them to obtain that which is legally yours.
Regis Sauger