What Can Happen If Someone Gets a Financial Judgment Against You

What Can Happen If Someone Gets a Financial Judgment Against You
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Last updated: September 2015

A judgment is a judge's order at the end of a lawsuit that one party (generally the "defendant" or person who was sued) owes another party (the "plaintiff" or person who filed the lawsuit) a sum of money. A valid judgment can be entered by a judge only after:

  • A lawsuit has been filed in court by the plaintiff; and
  • The defendant is notified about the lawsuit by being served with a summons to appear in court and a "complaint" (the document where the plaintiff initiates the lawsuit and includes why s/he is suing the defendant); and
  • The defendant has an opportunity to present his/her side of the story to the judge.

Many myths exist about the significance of a judgment being entered against a defendant. In reality, if a judgment is entered against you, the following can happen:

  • The judgment may be reported to credit agencies and show up on your credit report;
  • The judgment will accrue interest until it is paid off; this will cause the judgment to increase.
  • If you are working and take home more than $326.25 per week, the plaintiff may collect some of your wages until the judgment is paid off.  The plaintiff may collect: (1) the wages you take home on top of $326.25; or (2) up to 15% of your weekly gross pay (whichever is smaller).  (You always get to take home at least $326.25).
  • If you have bank accounts, the plaintiff may ask that the bank "garnish" (or turn over to the plaintiff) money from your account;
  • Similarly, if the plaintiff tries to garnish your wages and/or bank accounts, you may have to pay additional court costs.
  • Your other property and home may be subject to sale to satisfy the judgment but $15,000 of the property's value is exempt.
If the plaintiff tries to garnish your wages or a bank account, you should consult with an attorney to see if there is anything that can be done to stop the garnishment.

You have the right to request a court hearing to dispute the garnishment or to argue that some of your property is exempt from garnishment.

Before the other party can garnish your property, s/he must follow certain court procedures.

If you do not have wages, a bank account, or own a house, the judgment has little immediate significance but it may affect the defendant's ability to obtain credit, etc. in the future.  Public benefits (e.g. Welfare, Social Security, and Unemployment Compensation) are not exempt from garnishment and you will not be sent to jail or prison.

If a judgment is entered against you, you should ask the plaintiff to agree to a payment plan so that you can pay off the judgment in installments. If the plaintiff agrees and you make the payments on time, the plaintiff will not have to use the garnishment proceedings and you will not have the additional costs of a garnishment.  If the plaintiff does not agree to a payment plan, you can ask the judge if you can pay it off in installments. If you are being sued for $10,000 or less, Supreme Court Rule 288 allows the judge to order installment payments. If the judge orders installment payments, the plaintiff cannot use the garnishment procedures as long as you are current with your payments.

After you pay a judgment in full it is important to ask a plaintiff to sign a Release and Satisfaction of Judgment, a form that certifies you paid off the judgment.  You should then file this with the court.

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