How to Negotiate Debt With Judgment Creditors

Creditors can attach a judgment to your credit file if you fail to pay an old debt. Judgments stay on credit reports for up to seven years, and lenders checking your credit to see if you qualify for financing may charge a higher interest rate or deny your application once they see a judgment on your record. Fixing your credit and getting judgments removed calls for negotiating with your old creditors.

Instructions

1

Review finances to see how much you can afford to pay. Go through your finances and determine how much you have left after paying bills. Extra income can get rid of old debts and help remove a judgment from your credit file. If necessary, use personal savings to wipe out old debts.

2

Negotiate a debt settlement. Talk with creditors to see if they'll accept a lesser amount. For example, if you owe $5,000 on an old credit card, agree to settle the account for $2,500.

3

Work out an installment plan. Call up the creditor's customer service department and set up installment payments for old debts. Mention how much you can afford to pay monthly and then agree to make monthly payments until you've paid off the old debt.

4

Ask creditors to update your credit file after you've paid the debt. Paying an old debt doesn't automatically remove a judgment from your credit file. Creditors have to agree to update your file.

5

Get the settlement or payment plan in writing. Ask creditors to mail you a written document stating that they agree to a settlement or payment plan and that they agree to remove judgments from your credit report after you've satisfied the debt.