What is a Judgment?

A judgment is a legal document granted by a judge after a creditor shows the court a debtor has defaulted on repayment of his debt. A judgment lasts for a set number of years depending on your state but can be reinstated or renewed for additional terms in most states. To determine your state time limits on judgment renewal, visit bernsteinlaw.com (see Resources).

Renewing a Judgment

When a judgment is nearing the expiration according to your state, the creditor may choose to go back to court, and ask the court to extend the judgment for another term. When a judge grants the renewal of the judgment, interest is added to the amount of the original judgment resulting in a higher judgment dollar amount.

Judgment on Credit Report

Judgments are reported to the three major credit bureaus and have a devastating effect on your credit score. A judgment, however, can only remain on your credit report for seven years. The only negative entry on your credit report that can remain longer than seven years is a bankruptcy. Once the judgment falls off of your credit report after seven years, it will never appear on your credit report again even if the creditor has an initial judgment that is good for more than seven years or renews the judgment.

Remember

While a renewed judgment will not remain on your credit report after seven years, it does not mean you should not be aware of the consequences of a judgment. A judgment can be used to attach a lien to your property and can also be used to garnish wages or your bank account. Additionally, interest accrues every year making the balance grow larger with time.