WHAT IS A JUDGMENT?
A judgment is when a court resolves a controversy between two people or companies, usually by ordering one person to pay money to another. In Minnesota, most judgments are taken by debt collectors and money lenders and they are against ordinary people who have debt.
1. JUDGMENTS ARE ON YOUR CREDIT REPORT
Judgments go in the “public records” part of your credit report. They will appear next to things like tax liens and bankruptcies. Sometimes they are called “civil judgments.” These usually lower your credit rating. After bankruptcy, the judgment should say that it has a $0 balance. They usually stay on the credit report for 7 years from when the judgment was first entered.
2. JUDGMENT CREDITORS CAN FREEZE BANK ACCOUNTS AND GARNISH PAYCHECKS.
The judgment creditor is the person who sued and got the judgment. Freezing a bank account is called a bank levy. A bank levy means that the bank will give the creditor any money in the account that is not from Social Security. The bank will freeze the money and then give you 10 days to prove that either the money is protected from creditors, or that the money belongs to someone else. This is called the garnishment exemption process.
Chapter 7 and chapter 13 bankruptcies both often allow us to get back money that has been garnished or levied from you. But contact us quickly! There are limits to time and amount on how much we can get back for you through the bankruptcy process.
3. THE JUDGMENT IS AUTOMATICALLY A LIEN AGAINST YOUR HOUSE AND ANY LAND YOU OWN IN THE COUNTY WHERE THE JUDGMENT IS DOCKETED.
In Minnesota, judgments get docketed in county courts. Then the judgment is a lien against all of that person’s property in the county. For example, if there is a judgment against you in Hennepin County, then it becomes a lien against your house in Minneapolis, Saint Louis Park, Brooklyn Park, or any other city in Hennepin County. This means that if you sell your house, then the closing company will pay the judgment from the home sale proceeds. You can stop this by filing bankruptcy on the judgment and then doing a judgment removal.
4. THE JUDGMENT IS VALID FOR 10 YEARS AND CAN BE RENEWED FOR ANOTHER 10 YEARS BY THE PLAINTIFF
That’s right, a civil judgment often lasts for 10 years. Remember, that the statute of limitations to get a judgment in the first place is only 6 years from the due date of the last payment. This is relatively short when compared to the 20 years that the judgment lasts for.
5. BANKRUPTCY VOIDS JUDGMENTS
If you file bankruptcy before the judgment is entered, then the judgment stops immediately and the creditor never gets the judgment. You can also file bankruptcy on a judgment after the judgment has been entered. This means that the judgment gets voided and can’t be used to garnish a paycheck or freeze a bank account anymore. There is a different step after bankruptcy called judgment removal to let you sell a house without having the money to go to paying off the judgment. This extra step is called judgment removal.
If you have a judgment against you, then you should talk with a lawyer.
Walker & Walker offers free attorney consultations for anyone who wants to learn about bankruptcy. We have been able to fix judgments both by filing bankruptcy, and by finding mistakes or abuses that the debt collectors have made as part of collections. Call us today at 612-824-4357 or fill out the contact form on the side of the page to get started.
