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Judgments are not just ordinary debts. They are orders of the court that earn interest. Collection costs and fees can be added to judgments. Judgments can be renewed, which often compounds the rate of total interest owed. Judgments may be enforced any time a creditor (or a judgment enforcer, collection agency, or a collections lawyer) finds a lead to the debtor's assets.
In a bad economy, many judgment owners are more eager to aggressively recover judgment money from judgment debtors. Many judgment debtors would find it much cheaper and easier to simply pay something to settle the judgment against them. Settling can save a lot of money and get the judgment off of credit reports, which improves credit scores.
In most places, judgments can be renewed forever, so settling a judgment may be a good alternative to bankruptcy, or being forced to pay the judgment in full sometime in the future.
One way to settle a judgment is to contact the original judgment creditor. Note that if your creditor is a bank, credit card, or a collections agency, they almost always won't play ball and settle with a third party settler. Also, whenever your creditor is actively trying to recover the judgment against you, they will not want to settle. In these cases, you should try to settle with the creditor, bank, or collection agency.
Assuming your creditor is a person or a small company, you can also try and settle the judgment yourself. However, judgment creditors may keep negative feelings about the judgment in their mind. Most likely they will be skeptical, and perhaps be unreasonable about settling the judgment for much less than the full amount owed.
Another way to settle is to find a judgment settler. Judgment settlers (who are not general debt adjusters or settlers) are neutral third parties. They have no emotional baggage about the amount you owe, or the amount you can save by settling your judgment debt for much less than is owed.
Unlike some debt settlement companies, judgment settlers never charge the debtor. They offer free, no obligation evaluations. Judgment settlers are paid by the original judgment creditor.
How judgment settlers work:
1. The debtor provides any information they have about the judgment and the creditor.
2. The judgment settler verifies the judgment and that the creditor is authorized to collect the judgment.
3. The judgment settler offers the debtor a settlement amount.
4. If the offer makes sense, the debtor can choose to tell the judgment settler yes. Then the debtor gets their settlement funds ready, usually in the form of a cashier's check from their bank, or negotiates a payment plan they can work with.
5. The judgment settler has the debtor sign a contract where the debtor agrees to have the judgment settler attempt to settle the judgment for the debtor.
6. Then the judgment settler verifies they can make the deal work, persuading the judgment owner to agree to take less than the full amount due. If the judgment owner is not cooperative, the deal can't work, and this event costs the debtor nothing. (Some judgment settlers will pay a small amount to the debtor if the deal does not work out.)
7. The judgment settler takes the debtor's payment and gives them a satisfaction of judgment that is almost complete, but is not yet notarized or stamped by the court.
8. After the debtor's payment is deposited and clears (meet the debtor at the bank?), the judgment settler prepares and completes a notarized, court-endorsed satisfaction of judgment and then the judgment is marked paid in full. The debtor can then get the judgment off their credit report.
In summary, you have to pay something to settle a judgment, however what you pay satisfies the judgment, and you don't have to talk to the judgment owner. The amount of money you will save will be amazing, and the value of not having a judgment outstanding against you is priceless. (See our Strategic Judgment Buying article.)
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