How Long Do Unpaid Judgments Stay on Your Credit Report?

It can be stressful and scary to have a judgment filed against you that you haven’t paid. Getting a judgment can have a big effect on your finances and creditworthiness. It is important to know how long a judgment that you haven’t paid stays on your credit report. This lets you know what the judgment means and what you can do to fix it.

What is a Judgment?

A judgment is an official court decision at the end of a lawsuit It determines the rights and responsibilities of the parties involved regarding the disputed debt

If the court rules against you, that judgment will be entered into public records. It signifies you’re legally obligated to repay the creditor or plaintiff the judgment amount.

Types of Judgments

There are several types of civil judgments:

• Satisfied judgment – The debt is paid in full.
• Unsatisfied judgment – The debt remains unpaid.
• Default judgment – Issued because the defendant failed to respond to the lawsuit.
• Summary judgment – Entered without a full trial.
• Vacated judgment – A court overturns the judgment due to an error.
• Renewed judgment – The plaintiff seeks to collect on the judgment again.

Judgments can also be monetary (requiring payment of money) or non-monetary (requiring certain actions).

Do Unpaid Judgments Appear on Your Credit Reports?

Experian, Equifax, and TransUnion are the three main credit bureaus. Judgments that have not been paid no longer show up on credit reports.

This changed after a 2015 settlement between the bureaus and state attorneys general The settlement introduced new standards for credit reporting through the National Consumer Assistance Plan (NCAP)

Under the NCAP, public records like judgments could only be included on credit reports if:

• The agency updates the judgment data every 90 days.
• Sufficient personal identifying information associates the judgment with the consumer. This includes elements like your name, address, Social Security number, or birth date.

Judgments lack most of this personal data for privacy reasons. So, since July 2017, judgments that haven’t been paid have been taken off of credit reports.

How Else Do Judgments Impact Your Credit?

Although unpaid judgments aren’t on your credit reports, they still affect your creditworthiness. Here’s how:

• Your credit was probably already bad. If you didn’t pay your debts on time, which led to the judgment, your credit score was probably already going down. Missed payments negatively impact your credit.

• Judgments mean you owe money – Having an unpaid judgment means you’re legally obligated to repay that debt. Even if it’s not reported, creditors know you haven’t satisfied the judgment.

• Potential lenders can still find judgments – While not on your credit report, judgments are public record. Lenders may search court records and find your unsatisfied judgment. This could influence their lending decision.

• Interest accrues daily – As long as the judgment is unpaid, interest builds daily. This increases the total amount you owe.

• Judgments allow creditors to take collection actions – Creditors can pursue wage garnishment or bank account levies to collect judgment debts. This can further damage your finances.

How Long Do Judgments Stay on Public Record?

Each state sets its own statute of limitations to determine how long a judgment is legally enforceable. Timeframes vary widely across states.

For example, in Oregon a judgment is enforceable for 10 years. But in Alabama, judgments remain active for 20 years.

To find your state’s statute of limitations, contact the court clerk’s office in the county where the judgment was issued.

Can You Remove a Judgment from Public Record?

Yes, you can have a judgment removed from public record in certain situations:

• The statute of limitations expires, and the creditor has not renewed the judgment.
• You file for bankruptcy, and the judgment debt is discharged through that process.
• The creditor files a formal satisfaction or release of the judgment.
• You successfully appeal the judgment, and the court vacates or overturns it.
• Identity theft led to the fraudulent judgment, and you provide proof to the court.

How to Handle an Unpaid Judgment

If you have an outstanding judgment, it’s important to address it. Having an unpaid judgment hanging over your finances can be stressful. It also leaves you vulnerable to continued collection actions.

Some steps to take include:

• Review the judgment terms – Understand exactly how much you owe and the interest rate. Calculate how much interest accrues daily.

• Communicate with the creditor – Contact them to discuss payment options or settlement offers. Get any agreed terms in writing.

• Make payments – If possible, start making monthly payments toward the judgment debt. This shows good faith.

• Seek legal advice – Consult a lawyer experienced in debt relief for guidance on dealing with your unpaid judgment.

• Explore settlement – You may be able to settle the judgment for less than the full amount owed. Creditors often accept discounted lump sum settlements.

Moving forward, make on-time payments and keep credit card balances low. This helps demonstrate to lenders you can manage debt responsibly, even with a judgment on your record.

The Impact of Judgments on Credit Reports

• Unpaid judgments no longer appear on credit reports after a 2017 change.

• However, judgments still negatively impact your finances and creditworthiness.

• Lenders can search court records for unsatisfied judgments and factor that into lending decisions.

• Each state has its own statute of limitations on how long a judgment can be enforced. This varies widely from 10 years to 20 years.

• You can take legal action in certain situations to remove a judgment from public record or have the court overturn it.

• If you have a judgment, take steps to make payments or seek legal advice on how to resolve the unpaid debt. This will help improve your finances long-term.