Credit card judgments acknowledge that a debt is outstanding and spells out the way in which the debt may be recovered. This often takes place when a credit card cardholder has missed monthly paments and has not made an effort to work with the credit card provider to bring the account current.
To keep the situation from getting out of hand, it is best to contact the credit card provider and try to work out an arrangement for payments. It is often the case that credit card providers are willing to work with you. By doing this, it may be possible to come to an agreement with regard to monthly payments or a lump sum payment to bring the account up-to-date.
If a credit card provider feels it will get nowhere with you regarding your credit card debt, it may sell your debt to a collection agency. If so, you will then have to negotiate with the collection agency as the credit card provider has removed itself from the equation. Most collection agencies do not want to file a law suit against you as it is time-consuming and costly. They would much rather work with you to settle the debt, either through a lump sum payment or by arranging monthly payments.
You have the right to plead your case before the judge if your case does get this far. The judge may take certain circumstances into consideration, such as proving that the debt is not yours or that the seizure of the assets would mean serious issues for you. These types of situations, however, are reviewed on a case-by-case basis.
The judge may determine exactly which assets may be used to recover the credit card debt. Other options which the judge may use are garnishing your wages, taking money directly from your bank account, and placing a lien on your real property.
As you can imagine, a credit card judgment will adversely affect your credit score. This judgment will likely mean that you will be denied for most credit products for which you apply and, if not, you will be offered exorbitant annual percentage rates (APRs) and monthly and annual fees. Also, this credit card judgment can remain on your credit report for up to seven years.
It is important to keep in mind that a credit card judgment will likely affect future employment opportunities or advancement related to your current position. Additionally, a credit card judgment can make finding reasonable rates for home and car insurance very difficult.
Once the credit card judgment has been issued, do your best to pay the credit card debt off as quicikly as you can. Keep in mind that you can contact the credit reporting agencies after the debt has been paid in full to request that the debt be removed altogether or, at the very least, be revised to a “paid” status.
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