When a judgment is filed against you, it means a creditor turned over an outstanding debt to a collection agency, who turned the matter over to a lawyer, who filed a lawsuit against you, explains Shaev & Fleischman LLP. The judgment is then placed on public record and becomes visible on credit reports. There is a period time, between 20 and 30 days, where you may file an answer to the judgment, states Bankruptcy Law Network.
When filing an answer to the judgment, you may negotiate a consent judgment, where you and the credit agency agree on payment terms, or you may decide to file and take the case to trial, notes Bankruptcy Law Network. If no answer is filed, the judge may issue a default judgment. Once a creditor obtains a judgment, it acquires more rights. For example, the creditor may now garnish your bank account or wages. The rights afforded to a creditor vary by state.
After a judgment, a creditor may also freeze your bank accounts, seize your assets, suspend your driver's license if the judgment is for a vehicle accident, and place a lien on any land, buildings or residence you own, explains Shaev & Fleischman LLP. It is possible to resolve the judgment by paying off the debt, settling the judgment or by filing for bankruptcy, according to Credit.com.