Judgment Consequences of a Garnishment and a Bank Lien

The judgment consequences of a garnishment and a bank lien are that both appear in the public records section of your credit report for 7 to 10 years. A civil judgment also can cause your credit score to decrease significantly. Depending on your current credit score, a judgment can cause a significant enough drop to prevent you from obtaining new lines of credit.

Civil Judgments

When you have a debt like a loan or credit card and you stop making payments, the lender considers you in default of your credit or loan agreement. Usually, lenders will exhaust every other option, such as making payment arrangements with you, before they will file a civil suit against you. If the court awards in favor of the creditor, which they usually do unless you can prove the debt is not yours, the court enters the judgment into public record.

Garnishment Judgment Consequences

When a judge finds in the creditor's favor, your wages are subject to garnishment at a maximum of 25 percent of your after-tax earnings per pay period. The judgment date and the amount outstanding will appear on the public records portion of your credit report for seven years from the day it was entered into public record. The judgment remains on your credit report even after you pay it off. Unpaid judgments can remain on your credit report for up to 10 years from the date it was entered into public record.

Bank Lien Judgment Consequences

A bank lien garnishment occurs when a judge grants a creditor the ability to place a lien on your bank account. Neither a judge nor the creditor will notify you of a bank lien, they will however, notify your bank. Once your bank receives a notice of a lien against your account, it will freeze your account for the lien judgment amount. When your account is frozen, you cannot access the funds. If you have a credit card that is issued by your bank that you default on, the bank does not need a judgment order to seize the money in your account.

Credit Score Consequences

Credit-reporting agencies do not make their equations for calculating credit scores public, so there is no way of knowing exactly how much your score decreases when you have a judgment on your credit report. For your Fair Isaac Corporation score, your payment history on your lines of credit and your total amount of credit outstanding, including judgments, affects a combined 65 percent of your credit score. That means that the delinquencies on your credit accounts and the judgment will both decrease your score. FICO scores are the credit scores that most lenders use.