How Not to Pay a Judgment: 4 Legal Options in 2024

A creditor won a debt collection lawsuit against you. They now have legal authority to collect what you owe.

The court calls them a “judgment creditor.” They can take serious action if you don’t pay in full.

Don't Let Debt Collectors Win by Default

Responding to a lawsuit properly can prevent a judgment entirely. Our partner Solo helps you file the right legal response before the deadline expires.

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What Can Judgment Creditors Do?

Judgment creditors have several powerful collection tools:

Seize your personal property through legal attachment
Place liens on your home or real estate
Drain funds directly from your bank account
Garnish your wages through your employer

These measures hit hard when you can’t raise the money quickly.

Many people think court judgments are final and unchangeable. They pay out of fear of losing everything. But you have more options than you realize.

You can take specific steps when you can’t pay the full amount. Four main strategies exist to protect yourself.

Option 1: Vacate the Judgment

You can ask the court to “set aside” the judgment temporarily. Setting aside means declaring the legal decision invalid.

The court can revoke or overrule its initial ruling. When a judge vacates the judgment, the creditor loses all collection powers.

They can’t touch your property, levy your bank account, or garnish wages. The judge will schedule a new trial date instead.

Important limitation: You can only vacate default judgments. Default judgments happen when you fail to appear in court.

If you want to avoid default judgments, our partner Solo helps you respond to debt collection lawsuits properly.

Option 2: File an Exemption Claim

Exemption claims prevent creditors from taking certain property or money. State laws vary widely on what qualifies as exempt.

What’s protected in your state might not be protected elsewhere. Check your specific state’s exemption laws carefully.

Common Exemptions Include:

Federal benefits and support payments
Homestead and property exemptions
Wage garnishment limits and protections

Filing exemptions doesn’t erase your debt. It just protects specific assets from collection efforts.

Option 3: File for Bankruptcy

Bankruptcy is the only legal way to completely erase debt. A court can discharge many types of judgments through bankruptcy.

Chapter 7 bankruptcy eliminates most unsecured debts like credit cards and medical bills. Chapter 13 creates a manageable payment plan over three to five years.

Some judgments cannot be discharged through bankruptcy. Student loans and child support typically survive bankruptcy proceedings.

You can speak with a bankruptcy attorney for free to explore whether bankruptcy makes sense for your situation.

Option 4: Settle With the Judgment Creditor

Negotiation remains possible even after a judgment. You can work with the creditor to reduce the total amount.

Many creditors accept less than the full judgment amount. They prefer getting something over chasing you for years.

Settlement negotiations work best when you can offer a lump sum. Even 40-60% of the judgment might satisfy some creditors.

Get any settlement agreement in writing before paying. The agreement should state the debt is satisfied in full.

Act Quickly After Receiving a Judgment

Time matters when dealing with court judgments. Creditors can start collection efforts immediately after winning.

Don’t wait until your wages are garnished or accounts are levied. Take action as soon as you receive notice of the judgment.

Each option has specific deadlines and procedures. Missing these deadlines can eliminate your options permanently.

You have rights even after losing a lawsuit. Understanding these four options gives you the power to protect yourself.

Frequently Asked Questions

What happens if I ignore a judgment against me?

The judgment creditor can garnish your wages, levy your bank accounts, place liens on your property, and seize personal assets. Ignoring a judgment only makes collection efforts more aggressive and adds interest and fees to what you owe.

How do I vacate a default judgment?

You must file a motion with the court requesting to set aside the judgment. You'll need to show good cause for why you didn't appear originally and that you have a valid defense to the debt. Timing matters—most states require filing within 30-60 days of the judgment.

Can I negotiate a judgment debt after losing in court?

Yes, judgment creditors often accept less than the full amount. Many will settle for 40-60% if you can pay a lump sum. Always get the settlement agreement in writing stating the debt is satisfied in full before making any payment.

What types of income are protected from judgment creditors?

Federal benefits like Social Security, disability payments, veterans benefits, and child support are typically exempt from garnishment. Most states also protect a portion of wages and certain retirement accounts. Exemption laws vary by state.

Will bankruptcy remove a judgment from my record?

Bankruptcy discharges your obligation to pay most judgments, but the original judgment may remain on your credit report. Chapter 7 eliminates the debt entirely, while Chapter 13 includes it in your repayment plan. Student loan and child support judgments cannot be discharged.

How Not to Pay a Judgment: 4 Legal Options to Explore