A judgment is created when someone takes you to court, sues you and wins. A judgment is expected to be paid and can be collected by alternative means if you don't willingly pay it yourself.
Significance
A judgment can be collected by various means, including wage and bank account garnishment. Wage garnishments are limited to a certain percentage of your income, which varies by state. People who don't have a bank account and who don't hold a regular job may be able to escape these collection methods.
Time Frame
Each state has a statute of limitations for judgments, which is the amount of time a judgment holder has to collect the debt. Once this time limit has passed, a judgment holder can no longer use alternative methods to collect the debt and you do not have a legal obligation to repay it.
Warning
Some states allow judgment holders to renew their judgment, which allows the statute of limitations on the debt to start over.
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