What happens when there is a judgment against you?
This video gives you a quick overview of what to do when you find out you have a judgment.
Do you have a Judgment against you? Most people don't know they have judgments until they apply for financing, like a mortgage loan.
Judgments happen because debt collectors can sue people for unpaid debts, like
- credit cards
- repossessions
- evictions
- medical bills
- student loans
- and more
Every case starts by filing a lawsuit, then they have to serve you - but service in Arizona can be many things, not just handing you the lawsuit.
A debt collector, if they can't find you, can request the court for "alternative service of process." This means they can serve you by serving the last known address or by publication. Yep. So avoiding service of a lawsuit is generally not the best option.
Default Judgments
If you were served, and just didn't know it, then a Default Judgment will be entered against you. Debt Collectors will sue for the principal balance, interest, court costs, and attorney fees. Sometimes, this doubles or even triples the amount owed.
What to do when you find out you have a judgment.
Judgments do not just go away. In Arizona, Judgments are currently good for 10 years! Then they can be renewed! The whole time they just collect interest at the contract rate. So if it is a credit card, it could be 24% interest. If it was a title loan it could be 180%. Yikes! So there are a few things to do when you find out you have a judgment.
Step 1: Who is collecting?
Determine who is collecting for the judgment creditor. You might need to call the Court to get contact information for the company who obtained a judgment against you, then you can contact the company and find out if they are collecting or if they have hired or transferred to a third party.
Step 2: What are they collecting?
Now that you know who, you can request a copy of the Complaint, Exhibits, and the Default Judgment so you can find out what they are trying to collect.
Step 3: Is it your debt?
Mistakes happen. Judgments do not include information like middle initials, social security numbers, or birth dates - there is no information to identify you other than name.
- Common Name Problems: If you are John B. Smith and the company sued John Smith it is important to make sure the judgment is actually against you.
- Wrong Person: Sometimes a company just sues the wrong person, like you got divorced but you were sued anyway, or you were sued because a company thought you were the right person because you had the same name as the person they were trying to sue.
- Don't owe the debt: This is rare, but sometimes you get sued for a debt you do not owe either because you already paid it, or there is some other legal defense to owing it.
Reviewing the complaint to make sure it is actually your debt is important. For most people you know it's your debt before you even receive the Complaint but finding out who is collecting and how much it is are important factors in determining what to do next.
Options for dealing with Judgments
The right option for you will depend on your financial situation, but here is a brief overview.

Yes, you can request a settlement. Some judgments can be settled for as little as 35% of the balance with a payment plan, but some debt collectors will want 80% in a lump sum. Settling for pennies on the dollar is just not the case any more. Debt Collection is a multi-billion dollar industry now, and debt collectors are more aggressive than ever. Especially because they now have judgments that accrue interest for decades. If you can settle, great! Debt Settlement is a good option.

Sometimes you just cannot afford what the debt collector wants you to pay. So when settlement talks fail, debt collectors can still collect. They can garnish your wages, garnish bank accounts, levy assets, or even force the foreclosure on your home. Sometimes, filing for Chapter 7 bankruptcy is the best option when dealing with aggressive debt collectors.
Do Nothing
For some people, who are retired with no wages to garnish, whose only source of income is social security then accounts cannot be garnished, and who have no assets - well, doing nothing might be an option. The debt won't go away but the debt collector cannot do much to collect. Still, looking at bankruptcy or debt settlement is worthwhile.

Wondering if you have judgments?
You can check with the Court in the County where you live. Most courts have online access to cases, and you can search by your name.
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