Judgments

• A judgment is a decision by a court that you have an obligation to pay a creditor. A pending judgment is one that the court has not yet finalized. The judgment allows your creditor to attempt to collect the amount of the award. The judgment creditor accomplishes this by requesting garnishment of your pay or by seizing your property. He can also file a lien against any real property you own. Obtaining a judgment is only part of the process. Your creditor has to identify your assets before he can place a lien on them. This is not always possible.
  
  

Bankruptcy

• You can file bankruptcy to stop creditors from collecting on judgments against you, even if the court has not yet finalized any pending judgments. When you file for bankruptcy protection, any pending legal action against you halts. This occurs as soon as the court receives notification that you have filed. Under these circumstances, pending judgments never become finalized judgments. The creditor must appear under your schedule of debtors. If you filed under Chapter 13, repayment would be over several years and this would include the pending judgment debt. In most cases, if you filed under Chapter 7, the judgment would discharge and this would dismiss any pending judgment actions.
  
  

Exceptions

• Government judgments, alimony, child support and student loan judgments are not dischargeable. Filing for Chapter 7 bankruptcy does not protect you from enforcement. If you file under Chapter 13, it will delay enforcement of these nondischargeable debts until the court accepts your plan. You will then be able to pay these past due obligations over a period of years, as long as you pay your current obligations when they are due. If you fail to pay current obligations on time, the court will dismiss the filing and collection of your debts will be immediately enforceable.
  
  

Considerations

• You should attempt to contact your creditors before they obtain a judgment and work out a reasonable payment schedule. Judgments will remain on your credit report for seven years and will likely prevent you from obtaining other credit until you pay tem. Resolving the issue before it goes to court can save you a considerable amount of money, including attorney fees and court costs.