How can a creditor collect on a judgment?

A judgment creditor can use law enforcement to collect Having won a judgment, the creditor can levy bank accounts, garnish wages, and install a receiver in a business in order to collect the debt. The creditor can make you show up in court and testify about your assets and their locations.

How does a judgment work in a case?

A judgment picks the winner in a judicial contest. It is the determination of which side prevails, how much money is owed from the judgment debtor to the judgment creditor. Having won a judgment, the creditor can levy bank accounts, garnish wages, and install a receiver in a business in order to collect the debt.

Where does a judgment show up on a credit report?

A judgment is shown in the public records section of your credit report. Its effect is particularly strong, since it alerts the reader that some creditor already has a legal right to swoop in on your assets and your earnings, disrupting your ability to pay other creditors.

What is the interest rate on a judgment?

A judgment can grow after it’s entered The costs, fees and sometimes the attorneys fees a creditor spends to collect a judgment get added to the judgment. Judgments accrue interest as well. In California, the statutory interest rate on judgments is 10%, far more than money earns anywhere else.

How long does a creditor have to collect a judgment?

Even without an attorneys’ fees provision in a contract, the creditor may be entitled to attorneys’ fees if a state law allows it. Depending on the state, a creditor may have from five to as many as 20 years to collect a court judgment.

What happens when you get a judgment on a loan?

Part of the judgment will be the interest the creditor is entitled to collect under the loan agreement or contract. If you defaulted on a $1,000 loan at 9% annual interest and the creditor obtains a judgment a year later, the court will award the creditor $90 in “prejudgment” interest ($1,000 x .09 = $90).