A judgment is a legal decision issued by a judge. If you have defaulted on your debt payments, the creditor or collection agency can sue you for the unpaid debt. When a court summons is served, you are required to answer the complaint within the time mentioned on the summons. If you fail to answer the complaint by the specified date or appear in court after you have been notified, the court automatically renders the decision in the creditor's favor. This is known as a default judgment.

Can you be arrested after judgment?

Collection of a debt is considered a civil matter. Therefore, a warrant for your arrest cannot be issued.

If a creditor wins a lawsuit against an account holder, a judgment is recorded that legally acknowledges that the account holder owes the debt and is obligated to repay. As a result, the creditor can garnish your wages and bank accounts and put a lien on your property. The creditor won't be able to repossess or foreclose on your home or car. Unless you pay off the debt, the lien cannot be removed and unless the lien is removed, you will have difficulties selling your home. However, you cannot be taken to jail for not paying your debt.

Effect of a judgment on your credit report and scores

Once a judgment has been issued against you, it will be entered on your credit report and will remain for 7-10 years. It has a negative effect on your credit report and score. Moreover, a judgment can remain effective up to 20 years. This varies according to the state and the judgment can even be renewed before its expiration. Therefore, judgments are a matter of public record and can be viewed by potential employers and creditors or lenders.

If you fail to comply with the court order, it can result in further court action. Generally judgments specify a payment plan for you to repay the creditor the outstanding debt amount along with the fees incurred during the legal process. Depending on an individual's circumstances, repayment measures could include wage garnishment, bank account freezes, forfeiture of income tax refunds, or seizure of property (lien).

However, if you are not properly served with a notice of the lawsuit against you, you can file a Motion to Vacate the judgment or a Motion for Arrest of judgment. The Motion to Vacate the judgment nullifies the judgment and you can dispute the negative item off your credit report. Motion for Arrest of judgment too is more or less the same as Motion to Vacate judgment. This motion is a request to the court to overrule the judgment on the grounds that it has been granted in error.

Best way to avoid judgments

The best way to avoid a judgment is to pay all of your bills on time. If that is not possible, contact your creditors or the debt collectors and explain the situation. They may be willing to work out an alternative payment plan to help you pay down your debt. That is definitely better than allowing your creditor to take you to court.Moreover, judgment hurts your credit score. Thus, it is better to avoid a judgment.