Can I Write a Letter to Creditors After a Judgment Has Been Made?

If you don't pay a debt, your creditor can go to court and ask for entry of a judgment in a certain amount. Once the judgment is entered, the creditor has the right to use various methods to get its money back -- for example, by taking the funds in your bank accounts or retaining a portion of your wages. Even after the judgment, you can still write a letter to your creditor to negotiate.

Process

Before you start negotiating with your creditor, you need to determine the amount of money you can afford to pay. You can offer to pay once as a lump sum or prepare a series of smaller payments. After putting down your payment plan in writing, you can attach it to your letter and send it to your creditor. Because a debt collector may handle your debt instead of your original creditor, you may have to ask the court to give you the contact details of your creditor.

Benefits to You

Once your creditor gets a judgment, the law caps the interest rate that your debt can accrue. For example, your creditor can only charge the short-term Treasury rate plus 3 percent in Ohio. The sooner you pay off your loan, the less interest you have to pay. Depending on the result of your negotiations, your lender may also be willing to accept a lower amount as full payment of your debt.

Benefits to Your Creditor

Your creditor has already spent effort and money on getting the judgment. Collecting the judgment requires your creditor to dedicate even more resources to get the amount you owe. Going through legal processes to collect a judgment incurs expenses and causes delays. Discounting your debt in return for voluntary payment may help your creditor minimize its expenses and use its resources for other purposes.

Considerations

When you reach an agreement with your creditor, ask that your creditor agree to the new terms in writing. Then, keep a copy of the agreement in case a conflict occurs in the future. You may benefit from consulting with an attorney who specializes in consumer rights law in your state to determine the proper course of action. For example, the attorney would know whether your creditor has violated any judgment collection restrictions.