Credit can be useful at times. If you don't the pay the bill, however, the debt it leaves behind can be a burden. Unfortunately, unpaid debt doesn't disappear and can haunt you for many years. A creditor may try to obtain a judgment against you, and that judgment can have major consequences.
A creditor cannot file a judgment against you. A creditor files a civil lawsuit against you first. You then receive notice that you're a defendant in the lawsuit. You or your lawyer will have to appear on the court date. You can then tell the court if you dispute the debt and why. If the judge determines you do owe the money sought by the creditor, the court will issue a judgment against you for the amount owed. Also, if you fail to appear in court, the judge will issue a default judgment against you and you will owe the amount requested by the creditor. Many states allow you to appeal the judgment within 30 days, although there's no guarantee the judgment against you will be overturned.
A judgment is no laughing matter. It gives a creditor the legal right to pursue your assets. Depending upon the laws in your state, a judgment owner may be able to garnish a portion of your wages up to the amount of the judgment. The judgment owner can also place a lien on property you own. Some states also permit judgment owners to seize the funds in your checking and savings accounts to pay the judgment.
Each state has its own statute of limitations on judgments. This refers to the length of time a judgment owner has to legally pursue you for the debt. Once the statute of limitation passes, you're no longer legally responsible for payment of the judgment. Statutes of limitations vary from state to state. In Washington, D.C., the statue of limitations on judgments is three years from the date the court issues the judgment. In Florida, it's 20 years.
Just as judgments have statutes of limitations, so do debts. Once a debt ages beyond the state's statute of limitations, the creditor cannot legally sue you for it. Statute of limitation lengths vary from state to state and also vary depending upon what type of debt it is. If a creditor does sue you and the debt is outside the statute of limitations for your state, you can simply inform the court that the debt is expired and the court will dismiss the lawsuit. But if you fail to appear in court, the judge will issue a default judgment against you, even if the debt is expired.