Credit Card Judgments 101

December 21st, 2009 | Posted in Credit Card Debt

A credit card judgment is a court order which confirms that a debt is owed and the steps which will be taken to recover the debt. Typical “steps” to recover a credit card debt include the garnishment of wages, seizing of assets, or even placing liens against real property.

It typically takes months to get to the point where a credit card judgment may become an issue. This usually follows months of continual attempts to collect the amount owed. You shoudl try to do everything in your power to keep this from happening. If you feel you may be facing a credit card judgment, this article will relay general information about the process and will give you several things to consider as well.

Falling behind on your credit card payments will bring endless letters and phone calls your way from the credit card provider requesting that you make arrangements to bring your account current. The credit card provider will ask that you pay the amount due in full or make arrangements for monthly payments. If you do not bring your credit card account up-to-date within a specified amount of time, your credit card account may be charged-off.

If you make no effort to work with the credit card provider, your account may be sold to a collection agency who will most likely purchase your debt for cents on the dollar, normally for as little as 8 cents to 12 cents per dollar of debt purchased. The collection agency will attempt to collect the debt from you by yet again requesting either a lump sum or monthly payments. Your credit score will be damaged yet again if the credit card provider sells your debt to a collection agency.

Collection agencies are normally loathe to file a court action to collect a debt which to them is actually a small amount, as stated above, normally in the range of 1/10th of what you originally owed. If you do not come to an agreement with this collection agency, it may sell your debt to yet another collection agency and the process will begin all over again.

If this second collection agency cannot reach an agreement with you, it may go ahead and file a legal action against you for the collection of the debt. At this point, a credit card judgment may be in your future. It is your right to plead your case to the judge and, if you can show that the debt is not yours or if you can show that there are extenuating circumstances, the judgment may be altered by the judge.

On the other hand, if you are unable to prove that there are extenuating circumstances or that the debt is not yours, a court judgment, issued by the judge, will explain the ways in which the debt owing may be recovered. Some examples of possible recovery methods include (depending upon state law) wage garnishment, seizing assets, taking money from your bank account, and filing liens against your real property.

Your credit score can be seriously damaged by this process and it is wise to consider working with the credit card provider and collection agencies to resolve the debt issue. By doing this, you should be able to escape a credit card judgment.

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