What Is a Consent Judgment? Definition and Risks Explained

When a debt collector fails to collect payment, they often escalate matters. They file a debt collection lawsuit against you. If they win, the court enters a judgment. Our partner Solo can help you respond and avoid this outcome.

A consent judgment is one type of judgment you might face. Understanding how it works protects your financial future. You need to know the risks before signing anything.

Different Types of Judgments in Debt Collection Cases

A judgment is an official court order. The court decides based on facts and evidence. Three main types exist in debt collection lawsuits:

• Consent judgment: Both parties agree to settle the debt. You avoid court, but it still counts as a judgment against you.
• Summary judgment: One party claims the other lacks evidence. The court may rule without a full trial.
• Default judgment: You failed to respond to the lawsuit. The creditor wins automatically because you didn’t file an Answer.

Default judgments are most common in debt collection cases. Ignoring a lawsuit always backfires. The creditor gains powerful collection rights once judgment enters.

Judgments empower creditors to use aggressive collection tactics. They can garnish your wages and seize bank accounts. They can take other assets to satisfy the debt.

For example, Asset Acceptance LLC or Cavalry SPV I LLC might prove you owe $8,000. The court enters judgment for that amount plus interest and fees. Your paycheck gets garnished until the debt is paid.

Should You Agree to a Consent Judgment?

Debt collectors continue negotiating even after filing lawsuits. Many cases settle before trial. You might reach an agreement with the collector.

The collector may ask you to sign a consent judgment. Both parties must sign and file it with the court. The judge must approve it for the judgment to become official.

Think carefully before agreeing to a consent judgment. Your decision has serious financial consequences. The judgment appears on your credit report.

Here’s a common scenario: You settle for less than you owe. The creditor requires a consent judgment to close the lawsuit. You request the judge to enter judgment against you by signing.

Your credit score takes a major hit. Collectors sometimes promise not to report the judgment. That promise means nothing.

Credit bureaus don’t get judgment data from collection agencies. They review court records directly. They will find the judgment and add it to your report.

What States Allow Consent Judgments?

Wage garnishment rules vary by state. Some states limit how much creditors can take. Federal limits apply in Florida, Idaho, Oklahoma, Maryland, Ohio, and Utah.

Title III of the CCPA sets federal wage garnishment limits. Creditors can take 25% of disposable income typically. Some states offer more protection.

Alaska, Connecticut, California, District of Columbia, New Hampshire, North Dakota, New Mexico, and Oregon allow garnishment up to 75% of disposable income. The limit is 40 to 50 times federal minimum wage, whichever is higher.

Massachusetts, West Virginia, and Wisconsin protect 80-85% of disposable income. Four states prohibit wage garnishment entirely: Texas, Pennsylvania, North Carolina, and South Carolina.

File your response with our partner Solo to avoid judgment against you.

How Creditors Obtain Judgments

Creditors secure judgments through multiple pathways. Trial is the most familiar method. Both sides present evidence and arguments in court.

The collection agency hopes the judge rules in their favor. They want the court to order you to pay. Trials take time and money.

Pre-trial motions offer another route. A Motion for Summary Judgment is common. Either party can file this motion.

The motion argues no material facts are in dispute. The moving party claims entitlement to judgment as a matter of law. No trial is necessary if the judge agrees.

For example, you signed a loan agreement and stopped paying. You have no legal defense. The creditor can convince the judge to rule immediately.

The motion fails if important facts remain disputed. You might claim you never signed the agreement. The case proceeds to trial.

Understanding Default Judgments

Default judgments are the most common type in debt collection. They happen when you ignore the lawsuit. You fail to file an Answer within the deadline.

Missing the response deadline costs you the case. The creditor wins by default. You lose your chance to present defenses.

Never ignore a debt collection lawsuit. Default judgment gives creditors serious collection powers. They can garnish wages and freeze bank accounts immediately.

Filing a Motion to Set Aside Judgment

You can fight an improper default judgment. File a Motion to Set Aside Judgment. The motion reopens your case if granted.

You get a second chance to respond. You can present your affirmative defenses. Judges set aside defaults for specific reasons.

Valid grounds include:

• Mistake, inadvertence, surprise, or excusable neglect prevented your defense
• Fraud, misrepresentation, or misconduct by the debt collector
• The judgment has been satisfied, released, or discharged
• You never received the summons and complaint in person

Deadlines matter for these motions. You have six months for most grounds. File immediately if the judgment was satisfied or discharged.

Credit Bureau Collection Services officers Larry Ebert and Brian Striker violated federal law. They illegally tried collecting debts already paid. The FTC made them pay over $1 million in 2010.

Consent Judgment vs Settlement Agreement

A settlement agreement resolves the lawsuit between parties. You and the collector agree on terms privately. The court doesn’t enter an order.

A consent judgment is different. Both parties agree to end litigation. The court records the agreement as an official order.

Settlement agreements don’t appear on court records. Consent judgments do. Credit bureaus will find consent judgments.

Your credit report suffers with a consent judgment. Settlement agreements offer more protection. Negotiate for a settlement without judgment when possible.

Protecting Your Rights in Debt Collection Lawsuits

You have legal rights when collectors sue you. You can challenge the lawsuit. You can negotiate settlement terms.

Responding to the lawsuit is critical. File your Answer before the deadline. Assert all available defenses.

Collectors must prove you owe the debt. They must verify the amount claimed. They must show they have legal standing to sue.

Many debt collection cases have weaknesses. The collector might lack proper documentation. The statute of limitations may have expired.

You might qualify for exemptions from collection. Some income types are protected. Certain assets cannot be seized.

Professional help makes a difference. Our partner Solo guides you through the response process. You can fight back effectively.