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What happens if you receive a judgment in a debt lawsuit

A judgment is a court order stating that you owe the debt collector money because of a lawsuit. You may have received a judgment because the court decided in favor of the debt collector in a trial, or because you did not respond to a lawsuit that was filed against you. 

Important things to know

  • You owe the full amount right away unless the judge ordered a payment plan.
  • The court does not collect the money. It is up to you to pay, or the debt collector to collect. 
  •  You may be able to start a payment plan or negotiate with the debt collector.  
  • The debt collector may try to collect the money by taking money from your bank account or your paycheck. You can challenge this, but you must act quickly.  

  • You may be able to undo, or set aside, this judgment if you didn't know about it or in a few other situations. 

  • You will not go to jail for having a judgment against you. 

Options if you received a judgment

Pay the debt or allow the debt collector to collect the money from you

If you don't pay the debt, the debt collector may try to collect the money. For example, they may take money from

  • Your paycheck, called wage garnishment
  • Your bank account, called a bank levy 
As long as the money is unpaid, it gathers interest at 10% per year (for example, a $1,000 judgment becomes $1,100 after a year, $2,000 at ten years). The sooner it is paid, the less interest you will have to pay.
 

 

Negotiate to pay off the judgment under better terms

You may be able to negotiate a settlement with the debt collector to allow you to pay off the judgment under better terms.

In Limited Civil cases (cases for $35,000 or less), if the other side will not agree to a payment plan, you can ask the judge to order a payment plan. This requires filing a motion. This is complicated and most people need assistance from a legal expert to do it correctly. Contact your local legal aid, county law library, court's Self-Help Center to see if they help.  

Ask the judge to set aside (cancel) the judgment

Setting aside the default judgment “rewinds” the case back to the beginning. It does not mean you win your case. It means you could file an answer and present a defense to your case.

  • If you never received the Summons and Complaint
  • If you didn't understand that you needed to file a response or have a good reason why you didn't respond
  • If you didn't know there was a court case,
  • If have a good reason why you weren't able to be at the hearing where there was a default judgment against you
     
Setting aside the default requires filing a motion. This is complicated and most people need assistance from a legal expert to do it correctly. Contact your local legal aid, county law library, court's Self-Help Center to see if they help.

If you can't afford the judgment

When a debt collector tries to collect through a bank levy or wage garnishment, you may be able to defend your money or property from collection.

If you can show you need the money to pay for the basic necessities of life or if you receive money from Social Security or other sources that cannot be taken by debt collectors, you can ask the court for a Claim of Exemption from wage garnishment or a Claim of Exemption from a bank levy.

Debt lawsuits

What's next?

After a judgment against you, you may be able to protect your money from being taken through wage garnishment or a bank levy if you act quickly. To do this, you file a Claim of Exemption with the court.

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