Cinderella’s Sad Story of Garnishment

Once upon a time, Cinderella had a money judgment entered against her.  She thought nothing of it at the time because she could no more pay her debt than go to the ball.  Then along came her Fairy Godmother and next thing you know, Cinderella had won the Prince Charming lottery. Right in the middle of happily ever after, a creditor garnished Cinderella’s newfound wealth.  Her brand new great big mound of money was swept clean from her account, just like that—poof!—it was gone.  “Surely you would not take my good fortune from me!” Cinderella protested. “The judgment is good for 20 years,” replied the creditor.  And thus Cinderella went from rags to riches and back to rags again.   A Money Judgment is just a piece of paper, EXCEPT a creditor may watch your bank account over the next 20 YEARS.  If your credit score goes up, that creditor might reappear.  With a Money Judgment, he may get your car, your real estate (except homestead), or garnish your bank account without prior notice to you, freezing any good fortune you come into. Everybody should pay their debts; however, certain incomes are exempt to prevent a choice between paying the […] Read More

What If Your Credit Report Is Wrong?

Only time heals accurate negative information in your credit report.  No credit repair service can erase bankruptcies, judgments, liens, or bad loans, nor can they create a new credit identity legally.  So what do you do if something wrong shows up on your credit report? Consumers make mistakes; they buy things they cannot afford.  It may have been a mistake for you to max out your credit cards while you were still paying off your boat, but the bankruptcy you never filed…that is an inaccuracy on your credit report. Tell the credit reporting company about the inaccuracy.  The Federal Trade Commission offers the following sample letter to help you communicate your dispute. [Your Name] [Your Address] [Your City, State, Zip Code] [Date] Complaint Department [Company Name] [Street Address] [City, State, Zip Code] Dear Sir or Madam: I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received. This item [identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.] is [inaccurate or incomplete] because[describe what is inaccurate or incomplete and […] Read More

When Opportunity Knocks…After Judgment

The best way to avoid a judgment in Small Claims Court is to PAY YOUR BILLS.  Pay your bills on time every time and usually you can avoid Small Claims Court altogether.  For some people, though, “Pay your bills” is easier said than paid. Situations happen.  Medical hardships, job loss, divorce, and loss of income not only disrupt lives, they can affect good bill-paying practices and damage credit. Regardless of how you get to Small Claims Court, once there, you will probably be better off to avoid a collection judgment against you.  Even if you do not have the money to pay right away, you are not “safe” in your poverty.  You may count your misfortune as fortunate for the time being, but a judgment could hamper your recovery in the future. A judgment is a lien, good for twenty years and which can collect interest.  If opportunity knocks five or ten years after the judgment, you are still responsible to pay that judgment collection. Debt collectors know this.  They know they cannot collect on all judgments when they happen, but they also know that they have twenty years to wait for that money to come in.  Debt collectors monitor […] Read More

Debt & Judgment

You may not be as misfortunate as you think, and that could cost you.  Sometimes people come into money:  you could win the lottery, inherit a fortune, or simply land a decent-paying job.  Such good luck could be bad news if you have a judgment waiting to collect. A judgment may not mean much when you are broke and cannot afford to pay, but it will cost you later if you do come into money. A judgment is a lien good for twenty years.  Often creditors seek judgments not because they expect to collect right away.  Should you come into money within that twenty-year timeframe, you may never see it.  That judgment means the creditor can garnish your account without warning—whoosh!  It is gone!  Just when you thought you were turning things around, you are back to very little money. Seek good legal counsel if you are facing a judgment or heavy monetary fine.  A legal defense may be able to fit the penalty to your best possible outcome. Read More