I Paid My Judgment – Now What?

You have been dealing with this monkey on your back for a long time. You fell way behind on a credit card or other loan. Eventually it went to collections.

When the agency could not get the amount of money it wanted from you, it took you to court and obtained a judgment against you. This judgment gave the collection agency the legal right to put a lien against your house, garnish your bank account and garnish your wages.

During this long process, you were able to start saving some money. Perhaps you found help from a family member, friend or coach who worked with you to take control of your finances. Somehow you created a plan and worked it. You finally had the money to pay off the debt!

So what happens now? Do you need to file something with the court? Do you need to notify the three credit bureaus? Does the collection agency have to do anything?

The collection agency must file a Satisfaction of Judgment with the court.

This is not something that you should have to do. It is the responsibility of the collection agency (aka the judgment creditor) to do. And he has a specific amount of time to do this by law. Each state has its own timeline which you can find from your court. For example, the state of Utah requires the Satisfaction to be filed within 28 days of full payment.

If the judgment creditor does not file the satisfaction, you can file a motion with the court to have the Satisfaction entered for you. You will need to provide the court with proof of full payment.

Here in Idaho, if the judgment creditor does not file the Satisfaction and you are somehow damaged, the law allows you to sue for those damages. Perhaps you were denied a loan or a rental application. After all you did pay off the judgment so the world needs to be able to see that in your court record AND in your credit report.

Your state may also allow you to collect a penalty from the judgment creditor for failure to file the Satisfaction. California law allows you to collect any damages plus $100. If the judgment creditor demands you do something more than paying in full to get him to file the satisfaction, then the penalty increases to $250.

Credit reports contain some public record filings. Judgments are one of these. The credit bureaus automatically pick up any judgments as well as satisfactions of judgment.

Your credit report will show the judgment for seven years from the filing date. It will report the judgment as “Satisfied” when it picks up the satisfaction notice from the court’s records. You want to ensure the satisfaction notice is filed so your credit report is accurate.

When you pay off your judgment, be sure to check with the court a couple of weeks later to ensure the Satisfaction of Judgment has been filed. The collection agency is supposed to do this and usually they do. But if they don’t you now know how to determine the time frame for your state and what to do if the agency does not do its duty.