A judgment is one of the most powerful legal tools a creditor has against you. Unlike a collections call or a demand letter, a judgment comes with the force of a court order. If you just received one — or found one on your credit report — here is exactly what it means and what your options are.
What Is a Civil Judgment?
A civil judgment is a court's official decision that you owe money to another party (called the judgment creditor). It can arise from:
- An unpaid debt (credit card, medical bill, personal loan)
- A car accident or personal injury claim
- A breach of contract dispute
- An eviction proceeding (landlord wins, you owe back rent)
- A small claims court ruling
Once a court enters a judgment, the creditor has significantly more legal power to collect than before the lawsuit.
What Is a Default Judgment?
A default judgment is issued when you were served with a lawsuit and did not respond or appear in court. This is the most common way people receive judgments without knowing it — the lawsuit was served (to an old address, or a process server left papers that were overlooked), you didn't respond, and the court ruled in the plaintiff's favor automatically.
Default judgments can often be vacated (undone), but only if you act quickly and have a good reason for the default (you were never properly served, you had a medical emergency, etc.). More on that below.
How Long a Judgment Lasts
Civil judgments do not expire quickly. In most states, a judgment is valid for 10 to 20 years from the date it was entered. And here's the part most people miss: judgments are renewable. Before the judgment expires, the creditor can file a motion to renew it for another full term.
This means a judgment can follow you for decades if you never address it. It accrues interest (often at the state's statutory rate, which can be 8-12% in many states) every year it's unpaid.
How a Creditor Collects Using a Judgment
Having a judgment gives the creditor legal tools they didn't have before:
Bank Levy (Bank Account Seizure)
The creditor can serve your bank with a writ of execution. The bank freezes up to the judgment amount in your account and sends it to the court. You may receive notice after the fact. Some funds are exempt (Social Security, disability benefits, unemployment), but you must claim the exemption.
Wage Garnishment
The creditor can serve your employer with a garnishment order. A portion of every paycheck is withheld and sent to the creditor. Federal law limits garnishment to 25% of disposable income (or the amount above 30x the federal minimum wage, whichever is less). Some states have stricter limits.
Property Lien
The creditor can file the judgment in county records as a lien against real property you own. This doesn't force you to sell — but it means you cannot sell or refinance your home without paying the judgment first. It attaches to the property automatically in many states.
Seizure of Non-Exempt Personal Property
In some cases, a creditor can seize and auction non-exempt personal property — vehicles with equity, business equipment, valuable personal items. State exemption laws determine what's protected.
How to Vacate a Default Judgment
If you received a default judgment and believe you were never properly served (or had a valid reason for not responding), you can file a motion to vacate the judgment. To succeed, you typically need to show:
- Excusable neglect or improper service — you had a legitimate reason for not responding
- A meritorious defense — you have a valid defense to the underlying claim
There are strict deadlines for filing a motion to vacate — often 30 to 180 days from when you learned of the judgment, depending on your state. Act immediately if this applies to you.
What "Judgment Proof" Means
You are judgment proof if you have no income or assets that a creditor can legally seize. If your only income is Social Security, disability, or other exempt benefits, and you own no property with equity, a creditor may have a judgment against you but no practical way to collect it.
Being judgment proof is a temporary state. If your financial situation changes — you get a job, inherit money, buy property — the creditor can attempt to collect again (within the judgment's validity period). Judgment proof status is not a legal defense; it's a practical reality.
Bankruptcy and Judgments
Filing for bankruptcy can discharge most civil money judgments. Chapter 7 bankruptcy can wipe out unsecured debt judgments (credit cards, medical bills, personal loans) along with the underlying debt. Chapter 13 allows you to repay some or all of the judgment over a 3-5 year plan.
Important exceptions: judgments arising from fraud, willful injury, domestic support obligations, and student loans generally survive bankruptcy.
If a creditor obtained a judgment lien on your home before you filed bankruptcy, removing that lien (called lien avoidance) requires a separate motion in bankruptcy court — it's not automatic.
What to Do Right Now
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Find the original lawsuit. Check your county court's online records. Look up the case number on the judgment. Understand when it was filed, who the plaintiff is, and how much it's for including interest.
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Determine if it's a default judgment. If so, research your state's deadlines for vacating it and consult an attorney immediately.
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Review your exempt assets. Identify which of your income and assets are protected by state exemptions. Federal and state exemption laws vary widely.
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Consider your options. Pay in full (eliminates the judgment), negotiate a settlement (many creditors settle for less on old judgments), set up a payment plan, or consult a bankruptcy attorney.
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Monitor your bank accounts. If an active collection is underway, a levy can happen with little warning. Knowing your rights regarding exempt funds lets you assert them quickly.
Got a court document and not sure what it's ordering you to do? Upload it to PaperLens for a plain-English explanation of the judgment, the amounts, and the deadlines. Scan your document →