Getting hitched isn't all honeymoons and romance. Marriage also increases your debt obligations and monthly expenditures. Failure to pay those obligations means your creditors can take you to court to force your hand. A judgment against you disrupts your ability to get a mortgage, receive an auto loan and acquire credit cards. There is no best way to pay a judgment, but it should be a method that improves your credit rating and fits in your budget.
Lump Sum Payment
You can always forward a money order or payment to the creditor if you're lucky enough to have that much money available. First, you'll need to send the creditor a letter first requesting it vacates the judgment in lieu of payment; it's up to the creditor to decide if it will agree to that. If you do receive written confirmation the judgment will be removed from your credit report, forward the payment to the creditor. Keep all documentation that confirms the creditor will dismiss the judgment upon receipt of payment.
Settle for Less
Many creditors do not bargain after the point of judgment. You may still get them to settle for less than the total amount owed if you can provide a lump sum payment to immediately settle the account. Send your creditor a letter offering a settlement of at least 25 percent of the judgment amount. Your creditor may come back with a counter offer. Typical debt settlement ends at 45 to 65 percent of the original balance due. The creditor will send you a letter confirming the settlement offer once a deal is made. When you pay it off, submit your settlement confirmation document to the court as proof of payment in full.
Call the creditor to set up pay arrangements. Make regular, monthly payments until the judgment is satisfied. Many creditors provide this option instead of garnishing your check.
Debt Counseling Agency
Debt counseling agencies negotiate with your creditors on your behalf. They set up payment arrangements that fit your budget. You make payments directly to the debt relief agency who then forwards payment to all your creditors.
- Settling a Judgment for Less Than Owed
- What Do I Do If a Creditor Refuses to Give Me a Receipt?
- How Much Does Satisfying a Judgment Improve Your Credit Score?
- What Legal Action Can Be Taken If You Owe on Credit Cards?
- "When a Credit Card Debt Goes to Court, How Much Is It Usually Settled for?"
- Can Credit Card Debt be Eliminated?
- What Can a Credit Card Company Do If You Quit Making Payments?
- What Happens if a Creditor Refuses to Accept Your Offer?