ANSWERS: 1
  • If a credit card company does not receive payment for a debt, the debt will often be charged off and sold. In some cases, however, the credit card company will file a lawsuit against the debtor in the hopes of securing a judgment.

    Facts

    A credit card judgment occurs when a credit card company or collection agency sues you for an unpaid credit card debt and wins the lawsuit.

    Time Frame

    A judgment will appear on your credit report under "Public Records" for seven years. The judgment itself, however, may be renewed for a period of up to 20 years, depending on your state laws.

    Features

    A credit card judgment may entitle your creditor to garnish your wages or seize your bank accounts.

    Considerations

    Creditors are not permitted to garnish Social Security benefits, unemployment payments, government pensions or public assistance checks. Credit card companies are less likely to seek a judgment against debtors if the judgment cannot be legally enforced.

    Misconceptions

    Paying a judgment from a credit card company will not improve your credit score. Nor will it result in the judgment's being removed from your credit report.

    Source:

    Cardreport: The Fair Credit Reporting Act (section 605)

    U.S. Dept of Labor: Title III Consumer Credit Protection Act

    More Information:

    NEDAP: The Basics of Defending Creditor Lawsuits

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