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Judgment Lien Debt Settlement
A judgment lien is a lien placed against you or your property because a court granted judgment to the creditor when the creditor sued you. There are three basic ways to eliminate a judgment which can prevent getting a judgment lien if you catch it early:
A debt judgment is not a debt judgment lien . Eliminating the judgment does not automatically eliminate the judgment lien , once levied. A judgment lien filed on your property is also referred to as a “cloud” on your home’s title. The Property judgment lien can block mortgage refinances, home sales and more. If the judgment lien was filed against you personally, you may have forgotten about it, but it will follow you. Your wages may be garnished, bank accounts can be frozen, or, years later when you buy a home, you may find it immediately encumbered with that old lien. A judgment lien can be removed through the following steps.
Find the judgment lien Creditor: The first step is to find the creditor who owns the rights to the lien. Contact the creditor to find out the amount needed to pay off or satisfy the lien including all fees and interest due.
Satisfy the judgment: If you can pay the entire amount, pay the amount through a documentable method such as cashier’s check if required, or your own check so you get the cancelled check back. Ask for a copy of the satisfaction of judgment. If you cannot make a full payment of the outstanding amount, see if either a payment program can be created or whether a negotiated amount would be acceptable to your creditor to satisfy the judgment. Professional debt settlement firms know how to negotiate with creditors to reduce the payment so you can afford to pay it. Still ask for a copy of the satisfaction of judgment when the amount is paid in installments or is a negotiated payoff. The judgment will not be satisfied until the agreed amount is paid in full; that is when the satisfaction of judgment can be requested and obtained.
File the satisfaction of judgment: Even when you receive the satisfaction of judgment, if you do not have your own attorney representing you, do not assume the lien satisfaction and release is filed. Check to find out who needs to file it, and if necessary, file the satisfaction and release of judgment lien yourself. It will come from the creditor either way but skipping this final step can leave the lien on your property or on you for years.
Discharge the judgment and judgment lien through a Chapter 7 bankruptcy or satisfy them through a Chapter 13 debt reorganization. Discuss the judgments with your attorney BEFORE filing for bankruptcy to make sure the liens can be handled in the bankruptcy. Some judgment lien s are exempt.
Remove from Credit reports: Contact each of the major credit bureaus once the judgment lien satisfaction and release are filed to request the judgments are removed from your credit report.
In more instances than we’d like to believe, judgment liens are invalid; filed on the wrong debtor, or fraudulently filed. Contact an attorney if you believe you are in this situation. The attorney can sue the creditor to obtain an order to vacate the judgment from the county records. If successful, it would still be a good idea to follow up and make sure the release of judgment lien is filed. Follow that by letting the credit bureaus know the lien was invalid and has been vacated. Be prepared to provide copies of this to the credit bureaus if you need to.
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The Steps To Deal With Judgment Lien Debt
1. Vacate the judgment. A Motion filed to vacate is also referred to as a motion to set aside the judgment. This motion is asking the court to nullify the default judgment for particular reasons. Courts do not grant such motions except when the defaulting defendant can prove significant reasons recognized by law as legitimate excuses for not responding timely. As an example, if you did not know about the lawsuit because you were not served, you would not have responded to the suit. In that case, if your lawyer files a motion to set aside the judgment within the allowable period, you may be able to defend yourself now that you know about the suit. That means the creditor who received the judgment no longer has the authority to place a lien on your property or garnish your wages.
2.Satisfy the judgment. Paying the creditor the amount required to pay off the debt will satisfy the judgment. Even when creditors have a favorable judgment from the court, many are willing to accept less money than the judgment granted, to close out the books on that collectable. This is where hiring an experienced professional who can negotiate the debt on your behalf can make better financial sense than trying to navigate the minefield on your own. If you can make the payment in one lump sum, there is more room to negotiate the total required to pay the judgment off. If you cannot afford one payment, there is still negotiation room when setting up a payment plan. Once the plan is set up, stick to it in exactly the way it is set up. Keep track of your payments, either by ACH records or by cancelled checks. Keep those records until the debt is satisfied and you receive a copy of the satisfaction papers.
3.Discharge the judgment. I have never seen a professional recommend that you handle this on your own. A bankruptcy attorney can tell you when and if the judgment can be discharged through a chapter 7 bankruptcy. The Bankruptcy filing will place an automatic stay (freeze) on the judgment and any enforcement of that judgment.
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