How to Stop Judgments From Creditors

Creditors and debt collectors generally prefer to not file a judgment against you. Taking you to court costs money. The amount collected through a judgment would have to be shared with the attorney. For this reason, creditors will typically make numerous attempts to contact you and work out payment arrangements. However, if you don't respond to such attempts, you might receive a letter from an attorney informing you of the possibility of legal action against you. If you receive such a letter, it's important to take the right steps to prevent a judgment against you.

Instructions

1

Contact the attorney as soon as possible if you receive a letter from a law firm threatening to sue you.

2

Pay off the debt in full. This should stop the process to file a judgment against you. Make sure to get a receipt showing that the debt was satisfied.

3

Negotiate a reduced settlement if you cannot afford to pay the unpaid balance. Offering one lump payment is your best option. If you reach an agreement, ask for a written contract. Make sure the contract specifically states that the settlement amount is accepted as payment in full.

4

Set up an installment plan to pay the negotiated settlement if you cannot make a one-time lump payment. Creditors often allow debtors to pay a reduced settlement in three monthly payments. Keep the terms of the agreement. Make sure you receive a receipt each time you make a payment.

5

Make arrangements to pay the full amount if the attorney is unwilling to negotiate a reduced offer. You will need to make regular payments until the full amount is satisfied.

6

Request that the creditor report the debt as "Paid in Full" to the credit-reporting bureaus.

7

Wait about 60 days after making your last payment on the debt. Check your credit report to make sure the debt has a "Paid in Full" status.