After months of preparation, packing, and document gathering, you are finally
ready to move into your new home. The phone rings and you hear the words
that no new potential home owner wants to hear, “I’m sorry,
but you do not qualify for a mortgage.” The broker proceeds to tell
you that you have a past judgment on your credit report and the mortgage
cannot move forward until this problem is fixed.
Many New Yorkers are faced with this frustrating problem while attempting
to obtain a mortgage and it is important to know how to move forward should
it ever happen to you.
What is a default judgment?
A default judgment is a final decision issued by a court in a case where
the defendant has failed to appear in court. The judgment will state how
much money is owed by the defendant to the plaintiff.
What is a delinquent account?
A delinquent account is balance on which a borrower has failed to make
at least the minimum monthly payment by the due date.
What are public records?
Public records refer to county, state, or federal materials that are typically
viewable by the public. Common examples of public record information that
may negatively affect a credit report includes bankruptcies, civil judgments,
tax liens, foreclosures and wage garnishment.
Can a judgment be removed from a credit report?
Satisfying a judgment:
If you have a judgment filed against you, it will accrue interest and the
judgment creditor is going to attempt to collect on the debt owed. The
judgment creditor can do this in a number of ways including wage garnishment
or a bank levy. Paying off a judgment is beneficial to your credit health.
Once the debt is paid, the status of the judgment on your credit report
will be updated to show that it has been satisfied. However, paid judgments
can be reported for seven years from the date that they were entered by
Settling a judgment:
Judgments can be negotiated and settled for a lesser amount even if they
cannot be vacated. If you negotiate a settlement, ask the creditor or
collection agency to agree to file a satisfaction of judgment when you
pay the agreed amount. It is important to have every step of the process
Vacating a Judgment:
Vacated judgments are different from satisfied or settled judgments. When
a judgment is vacated it is as if the judgment never existed whereas a
satisfied judgment simply means the judgment has been paid. A court may
vacate or modify a judgment if the creditor has obtained a default judgment
but you were unaware of the deficiency in the case or you were unable
to defend yourself due to a lack of notice. It is important to act quickly
and you must have an acceptable legal and factual reason for such a request.
A vacated judgment should allow for the removal of the judgment from your
credit report. In some cases having a vacated judgment removed is as simply
as disputing the item with the credit reporting agency and providing a
copy of the order to set aside judgment. In other cases it is not as simple
and requires you to press the issue with the credit bureaus. Having your
judgment set aside or vacated is the
only way to have it removed from your credit reports sooner than the “seven
years from date filed” date.
Step by Step for Vacating a Default Judgment here!
Contact a Debt Attorney in New York City
Vacating or settling a judgment can be a complicated and confusing procedure.
At Lebedin Kofman LLP, we are available to help you through each step
of your case. Do not hesitate to receive the assistance you need from
our debt attorneys serving New York City!