What is a Judgment?
A judgment is a court-signed document that allows your creditors to seize your assets or property when you’ve missed payments on a loan or debt. A judgment is issued ONLY AFTER you’ve been sued for any unpaid debt incurred.
Lawsuits in Portland can be in “Small Claims Court” or “Circuit Court.” A small claims action is for less than $10,000, and lawyers are not allowed to appear in small claims court. A lender is not REQUIRED to sue in small claims court and can, with a lawyer, elect to sue in Circuit Court even if the debt is under $10,000.
Before filing a lawsuit, your creditors will probably start the collection by giving you several phone calls. After phone calls and threatening letters, a creditor may decide to file a lawsuit. The lawsuit must be given to you, but they do NOT have to give it to you personally! A lawsuit can be left at your home with a person who lives there over the age of 14. The law will treat this as a valid “service” of the lawsuit.
Once a lawsuit is served, you will have a limited time to respond. In the Multnomah County small claims court, you only get 14 days to respond to the lawsuit. In Multnomah County Circuit Court, you get 30 days to respond. If you do not respond in time, your creditor can obtain an Order of Default from the Judge.
What is an Order of Default?
The Judge must sign the Order of Default and will do so only after she is satisfied that you have been properly served. Once the Order of Default is entered, you no longer get the opportunity to defend yourself. In minimal circumstances, you may be able to have the Order of Default set aside and regain the ability to defend yourself. After the order of default is entered, the party suing you will submit a Judgment to be signed by the Judge.
That Judgment ends the lawsuit and will spell out what you owe to the creditor, including costs, fees, and interest. That Judgment will accrue interest going forward of at least 9% – sometimes much more. Interest is VERY BAD NEWS – if you pay nothing to a judgment, the amount you owe will be about DOUBLE in ten years!
What can you do to STOP a JUDGMENT?
If you’ve been sued for your debts in Portland, here are several things you can try:
- Call the party suing you and ask if you can settle the debt at a discounted price
- Offer a lump sum payment if you can
- Request a payment plan
- Consult a debt defense attorney in Portland, Oregon
Remember that old saying – “a bird in the hand is worth two in the bush”? Most creditors suing for money would rather have a guaranteed payment (even if discounted) than a promise of future payments, so don’t lose hope!
What if You Can’t Afford a Lump Sum to Settle?
If you cannot afford a lump sum to settle, then ask the creditor if you can set up a payment plan. Most creditors would prefer voluntary payments as opposed to coerced payments through garnishment. In return for your voluntary payments, you want them to agree to leave you alone and not garnish your wages or bank accounts. A promise to leave you alone is called a “Covenant not to Execute,” which is a pretty important legal document, and you may want legal help concerning it.
Stipulated Judgment or a Confession of Judgment
If you reach a payment arrangement, the party suing you will still likely want a “Stipulated Judgment” or a “Confession of Judgment” to be signed by you. Those documents give the other side leverage to take money away from you if you fail to make the payments you promise. These are all fairly technical documents, and you should really consider hiring a lawyer. Even if you cannot afford a full legal defense to the lawsuit, some lawyers (like us!) will charge a reduced fee to help settle a debt and protect your interests.
If you cannot afford any payments, then you probably should at least consider bankruptcy as the best of bad options.
I live in Portland. How long will a Judgment against me last?
Judgments remain valid for ten years AND CAN BE RENEWED for another ten years. In other words, this debt can chase you for nearly a quarter century! We have represented many people who made poor decisions as young adults, then ignored a judgment, and suddenly when they are hard at work in their prime earning years – BAM! a lawsuit judgment reappears, and wage and bank accounts get garnished.
Seek Legal Assistance When it Comes to Getting Rid of Lawsuit Judgments
If a creditor gets a judgment against you and the debt is dischargeable in a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, filing for bankruptcy will wipe out a creditor’s ability to collect. Judgments, however, can create a lien on your property, and liens don’t automatically go away in bankruptcy. An experienced, nationally certified bankruptcy attorney will know this and take the necessary steps to wipe out a judgment lien after the debt has been discharged.
Choose to seek the legal assistance of a reliable bankruptcy attorney in Portland as soon as possible to ensure you are on the right track!