Category Archives: Judgment

Your beloved has died and his creditor puts a lien and judgment against him

You are very upset at the sad demise of your beloved one in your family. And the most saddest part is you receive a letter in your mailbox about the creditors suing your beloved for his past debt. What will you do in a situation like this? Are you supposed to pay his debts to avoid the legal actions?

Well, the short answer is NO. You are not supposed to pay for someone else’s debts. The debts will be forgiven by the credit card companies once they come to know about the death of the concerned person. However, they may be certain scenarios in which the debts of the deceased person can still be passed on to his family members and they may be forced to pay it.

If you have a joint account with another person who has already died, then the creditors will force you to pay up for the deceased person’s debts.

If you are living in one of the community property state, then the laws may force one of the spouse to pay the debts of the deceased person. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are all community property states.

In a community property state, the laws are very strict. The property in a marriage is recognized to be joint, liabilities are also treated as joint as per the laws. Therefore, if one of the spouse has died, it is important to speak with the local officials to see what can be done regarding the credit card debts that your spouse had before his death.

If you are not living in any of the community property state, and you have a joint account with someone, you will still be liable to pay his debts after his death. All the assets and liabilities will be put into an estate. The credit card companies will try to recover their money from the estate of the deceased person. Once there is nothing left in the estate, the credit card companies will forgive the remaining balance. Because of this procedure, the family members will receive very little or nothing in terms of inheritance if the deceased person had debts to the credit card companies.

Helpful Resources:

http://www.irs.gov/irm/part25/irm_25-018-001.html

http://www.irs.gov/irm/part25/irm_25-015-005.html

How to remove a judgment that is being reported by the credit bureaus

Everyone wants to manage his finances in the best possible ways. You can either do it by earning money from different sources, or borrowing money from different banks or put your house, car as a collateral in getting approved for the loan. No one can predict the future and no one knows the damage on your credit report can hurt you financially or socially. Based on the credit scores, we can determine a person’s credibility, his payment history, and how he had been using his credit. In short, it is a report that analyzes whether the person is worth of any new credit or not.

Remove a Judgement

Remove a Judgement

If you have a judgment on your credit report, it clearly gives an indication that you are no more worth of any new credit and finance. In order to get rid of such judgments, follow the simple steps mentioned below.

It is important that you feel confident and understand the concept of basic human rights as per the individual laws in every state. As per the laws, every individual has the right to challenge any inaccurate item showing up on his credit report.

Your next step should be to carefully review your credit report and see that everything reported on your report is correct by all means. If there is any error in it, it must be the errors reported by the credit bureaus. You must immediately contact the credit bureau who is reporting this inaccurate item and get it fixed as soon as possible. You might face a few hurdles in getting a judgment removed from your credit report. If you still owe to the creditor who has filed the judgment against you, then try to make out some payment arrangements with the creditor of pay off the judgment as soon as possible.

Credit bureaus

Credit bureaus

The next step is to send letters to the credit bureaus and dispute the judgment that is showing up on your credit report. You must point out all the errors that can be removed from your credit report and make a request to remove the judgment. Usually, the credit bureau will take 25 to 30 days to verify the disputed items with the original creditors. If your dispute is found to be correct, then the negative item will be removed from your credit report.

During this time period, you don’t have to do anything. Once you have the updated credit report, you will come to know which portion was verified by the credit bureau and which item was removed based on your dispute. Even after that, if you still think that there is something showing up on your credit report that should not be there, you can again contact the credit bureaus and request for removing that negative item. Remember that its a big achievement if you can get a judgment removed from your credit report.

Though you might be tempted to think you need a masters in taxation to keep your finances in order, in this case a little persistence and legwork should go a long way.

Helpful Resources:

http://www.usa.gov/topics/money/credit/credit-reports/bureaus-scoring.shtml

https://www.ftb.ca.gov/individuals/liens/credburu.shtml

Ways to legally remove a judgment from your credit report

You have a judgment showing up on your credit report. You have two choices. Pay off the debt and get a satisfaction of judgment or dispute the item with the credit bureaus.

Judgment

Judgment

A judgment is a court order for someone who has not been able to pay off his past debt and the creditor has filed a lawsuit against him. The court will not force the debtor to pay back the creditor. Instead, the creditor has to take necessary actions on their own to collect the debt from the debtor. There are several ways of doing this.

If the debtor owns a property, they can have the judgment recorded in the counties where the property is located. If the debtor is trying to sell or refinance the property, a title search will show the judgment. The judgment is a lien on the property, just like a mortgage, and it has to be paid off before the property can be sold or refinanced.

If the judgment is for a high amount of debt, and the debtor has non-exempt equity in the property, then the creditor will try to put a lien on the property and then sell it to pay off the judgment. Now, if the debtor is residing in that property, there are certain rules that must be followed. For example, in US, a creditor cannot claim a certain portion of the equity in the real estate. This means that the debtor can keep that portion in equity from the sale.

Not only just property, judgments can also be collected against bank accounts, and wages through garnishment. Finally, a creditor can elect to have the county sheriff seize non-exempt personal property from the debtor and have it sold at a Sheriff’s Sale.

Unsatisfied civil judgment will have a negative impact on your credit scores. The credit bureaus collect information about judgments by searching real estate and court records. Once you have paid off a judgment, you must ask the creditor to file a satisfaction of Judgment with both the court, and in any other counties where the judgment was recorded. This will prove that the judgment was paid, and it will not do any damage to your real-estate transactions.

Once the satisfaction of judgment forms are filed, still if the judgment shows up on your credit report, then you must dispute the item with the concerned credit bureaus. Write a dispute letter to each of the credit bureaus informing them that the judgment is been paid. You can also attach a copy of the satisfaction of judgment from the court. The credit bureaus will have 30 days to verify your information with the court, and if all the information is found to be correct, they will show it as a paid judgment on your credit report.

In some states, the social security number of a judgment debtor is not included in the court file. Because of this, the credit bureau may list the judgment on the credit reports of all debtors with the same or similar name. If you see a judgment wrongly showing up on your credit report, immediately write a dispute letter to the credit bureau and get it deleted.

Important links:

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm

https://ows2.gov.ns.ca/LandRegistrationResourceMaterial/Land_Registration/Bankruptcy/Discharge_of_Bankruptcy/Discharge_of_Bankruptcy_Remove_Judgment_Roll_only.htm