Is There a Statute of Limitations for Collecting on a Judgment?

Statute of limitations laws restrict the collection of all types of debts, including court judgments. If the judgment is not collected within the time frame prescribed by law, the creditor may never realize the amount of money awarded by the court.

Judgment Collections

Courts issue judgments, but don't act as collection agencies. The creditor must pursue its judgment just as it would any other debt. Judgments do, however, make it easier for creditors to actually collect what they are owed through asset seizure and garnishment.

Statute of Limitations

State statute of limitations laws restrict the length of time that a creditor has to use certain methods, such as filing a lawsuit, to collect a debt. In many states, statute of limitations on judgment collection is considerably longer than that for collecting other types of debt. For example, in New York, the statute of limitations on collecting a credit card debt is six years. If that debt ends up as a court judgment, the statute of limitations grows to 20 years, which can be renewed by court order.

Credit Reporting

Judgments end up in court records, available for anyone to see, including credit bureau employees. A paid judgment can stay on a debtor's credit report for seven years. If the judgment is not paid, it can stay on the debtor's report until the statute of limitations on judgment debt runs out, or seven years has passed, whichever is longer.

Stopping Judgment Collections

Because the length of time to collect a judgment is often very long, debtors who want to put an end to collection efforts and continued damage to their credit report have three options. The first is to pay the judgment in full. The second is to settle the judgment with the creditor for less than the debtor actually owes. The third is to file for bankruptcy. Some debts are dischargeable in bankruptcy, which means that the judge can eliminate them, though others, such as judgments from injury lawsuits caused by the debtor's decision to drive while intoxicated, are nondischargeable. A Chapter 13 repayment plan can, however, make repaying a nondischargeable debt manageable: The bankruptcy court includes the judgment in a repayment plan and the debtor continues to make payments on it every month. In return, the court issues an automatic stay against the judgment creditor which prevents wage garnishment, bank levies or other collection efforts.