How Long Does a Judgment Last?

Getting sued and losing can be scary. A court judgment against you can affect your finances for years. But just how long does a judgment last? And what can you do about it?

Well, first things first. When a court rules that you owe someone money in a lawsuit, that court order is called a judgment. It officially says you’re required to pay the amount awarded by the court (though collecting it is another story).

So how long do you have to deal with a judgment hanging over your head? Unfortunately, judgments can hang around for a long time. Here’s what you need to know about how long judgments last and what you can do about them.

How Long Do Judgments Last?

The short answer? In most states, judgments are valid for around 10 years. But it varies quite a bit by state. Here’s a quick rundown:

• In California, judgments are enforceable for 10 years and can be renewed for another 10 years after that.
• In Florida, judgments last for 20 years and can be renewed indefinitely.
• In New York, judgments last for 20 years.
• In Texas, judgments are valid for 10 years and can be renewed for another 10 years.

So in most states, you’re looking at around 10-20 years. But even after that time is up, creditors can often renew or revive the judgment to get another decade or more of enforceability. The clock basically resets if they renew it in time.

What Happens If You Don’t Pay?

Now, just because a judgment lasts 10+ years doesn’t mean the creditor will actually bother collecting that entire time. But they have options if you don’t pay up. Here are some of the common ways creditors enforce judgments:

• Wage garnishment – They can get a court order to have your employer automatically deduct a portion of your paycheck to pay the judgment.
• Bank levy – They can seize money directly from your bank accounts.
• Lien on property – They can put a lien on your house or other real estate so you can’t sell it without paying off the judgment.
• Seizing assets – In some states, they can have the sheriff seize valuable assets like your car.

So judgments have real teeth behind them. Ignoring a judgment isn’t going to make it go away. And the creditor has years to take collection actions if you don’t pay voluntarily.

How to Get Rid of a Judgment

Okay, say you lost a lawsuit and are stuck with a judgment. What are your options? How do you get a judgment off your back?

Well, you have a few options:

1. Pay it off – If you have the money, paying off the judgment in full obviously ends it. But that’s easier said than done.
2. Negotiate a settlement – You may be able to settle for paying less than the full amount if you negotiate with the creditor.
3. File for bankruptcy – Bankruptcy usually discharges or wipes out judgments, with some exceptions like student loans or alimony.
4. Wait it out – If you don’t have assets to seize, creditors may give up trying to collect once the judgment expires.

Let’s look at each of these options in a little more detail:

Pay Off the Judgment

Obviously, the best case scenario is having the cash to pay off the judgment in full. That immediately satisfies the debt and ends the creditor’s collection rights. But judgments can be massive, so coming up with the money isn’t always realistic.

If you can borrow money or otherwise scrape together the funds to pay it off, great! But don’t let an unrealistic judgment force you into bankruptcy or something else extreme.

Negotiate a Settlement

If paying in full isn’t feasible, try negotiating directly with the creditor. Many may agree to settle a judgment for less than the full balance – say 50% or less. It depends on factors like:

• How long the judgment has been outstanding
• How aggressively they’ve tried to collect so far
• How much money they think they can get from you
• How motivated they are to get quick cash

Settling lets them recoup something immediately, while ending their collection costs. And it gives you debt relief. Both sides win. So it never hurts to try negotiating. Get any settlement deal in writing!

File for Bankruptcy

If you have no way to pay and can’t settle, bankruptcy may wipe out the judgment entirely. Most judgments can be discharged through Chapter 7 or Chapter 13 bankruptcy. That means the debt goes away and the creditor can’t legally collect on it anymore.

There are exceptions though. Student loans, alimony, child support, and some other debts can’t be discharged. Talk to a bankruptcy lawyer to understand your options.

Wait It Out

If you don’t have wages to garnish or assets to seize, some creditors may get frustrated trying to collect on a judgment after enough time passes. After several years of getting nowhere, they may cut their losses and give up. The judgment technically still exists though until it expires after 10-20 years depending on your state.

Letting a judgment expire isn’t foolproof. The creditor can still renew it down the road. But if you have no assets now, it buys you some time debt-free. Just be prepared to possibly deal with it again later.

Act Fast to Resolve Judgments

Getting sued and losing feels lousy. But don’t panic if you find yourself facing a judgment. Just act quickly and decisively to get it resolved. Your options include:

• Paying it off
• Negotiating a settlement
• Pursuing bankruptcy
• Waiting it out

The sooner you deal with it, the sooner you can move on. Judgments may hang around awhile, but they don’t have to ruin your life. Get proactive and you can overcome them.

Need help dealing with debt collectors or judgments? At Delancey Street, we offer free financial advice and counseling. Our experts can explain your options and legal rights. Contact us today to discuss your situation.