How to Settle a Public Record Judgment

••• Palais de Justice de Montpellier image by Florian Villesèche from

A formal decision by the court is called a judgment. When it comes to debt, a creditor sues the debtor in court, and, if the court agrees with the plaintiff, a judgment is entered by the court against the debtor for that dollar amount. Depending upon the laws in your state, the holder of a judgment can try to collect on the debt for many years. Some states, like Texas, allow the owner of the judgment to renew the judgment after the initial expiration of the debt is over, but it doesn't allow wage garnishment. For many debtors, settling a judgment is in their best interest because it stops the collection process and the amount of interest accruing on the account. Here are the steps you can take to settle a judgment against you.

Know your rights. Even with a judgment against you, different states limit the collection of that debt. In Georgia, creditors have up to seven years to collect on a judgment, but in Alabama, they have 20 years. Also, if you're threatened with wage garnishment, realize that Title III of the Consumer Credit Protection Law restricts wage garnishment against employees. It's important to familiarize yourself with the collection laws in your state before negotiating a settlement to ensure you're not taken advantage of.

Obtain the current payoff amount from the creditor or collection agency that received the judgment against you. After a judgment, you should have received documentation detailing the amount of the judgment, either at the court hearing on the day the judgment was entered or in the mail a few days later. If the judgment belongs to a collection agency, under the Fair Debt Collections Practices Act (FDCPA), they must provide to you in writing the amount of the judgment and any further legal actions they intend to take against you, such as wage garnishment or liens. If you are not certain of the amount you owe, call the creditor or collection agency to get this information. Keep in mind that once a judgment is entered against you, that amount continues to earn interest until the debt is either paid in full or settled. The sooner you take care of it, the cheaper it will be to do so.

Mail a letter to the creditor or collection agency that details the amount you feel comfortable paying. Offer a figure that's lower than what you can actually afford. If you can pay $2,000 toward a $3,000 judgment, offer $1,000. This will leave room to negotiate later on. Make sure you send the letter by certified mail, return receipt requested, so you have proof that the recipient received your offer.

Wait to hear back from the creditor or collection agency. If you receive a call, avoid making any payments over the phone. Get the settlement agreement in writing; if you fail to do so, the creditor or collection agency may not consider your payment as full settlement of the debt. Instead, they may view it as a payment toward the debt and still come after you for the difference. Also include in the settlement agreement that the creditor will file a Satisfaction of Judgment document with the court that indicates that the judgment has been satisfied.

Send payment of the agreed-upon settlement amount via certified mail, return receipt requested, once you have a written agreement in hand. Make payment via cashier's check or U.S. postal money order. Never give a collection agency access to your checking or savings account. If you do, there's a chance they may withdraw more than the agreed-upon amount, and it may overdraw your account.

Check your credit report one month after you've satisfied the judgment. Make sure your report indicates that the judgment is paid and has a zero balance due. Under the Fair and Accurate Credit Transaction Act (FACTA), consumers are entitled to receive one free credit report from the three major bureaus: TransUnion, Experian and Equifax. You may order one report per year at the bureau's website, by phone or by mail. You may also order from the website, which Congress created under FACTA specifically for this purpose.

File a dispute with the credit bureau if the judgment information is inaccurate. Under the Fair Credit Reporting Act (FCRA), only accurate data may appear on your credit report, and you have the right to have any errors corrected. You can file a dispute online at the bureau's website, by mail or by phone.


  • Save your certified mail receipt, since it contains the reference number you will need to track delivery. Also save the receipt received when purchasing a money order or cashier's check in case you need to verify that the creditor cashed it.


  • Avoid checking your credit report from a public computer to prevent identity theft.