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There are only 3 ways to get rid of a judgment: 1) Vacate it; 2) Satisfy it, or 3) Discharge it. In your analysis of which approach is best for you, you should follow that same order: First, can I vacate the judgment? If not, can I satisfy the judgment? If not, can I discharge the judgment in bankruptcy?
Is vacating the judgment an option for me? If you contested the case (answered the lawsuit) and the court entered a judgment against you, vacating the judgment will be very unlikely. If however a default judgment (you did not answer the lawsuit) was entered against you, you should determine if you can have the judgment vacated (or what is sometimes referred to having the judgment “set aside”). In order to vacate a judgment in California, You must file a motion with the court asking the judge to vacate or “set aside” the judgment. Among other things, you must tell the judge why you did not respond to the lawsuit (this can be done by written declaration).
The reason and the timing of your motion are very important and really should not be done without the assistance of a lawyer. Generally speaking, if you had no actual notice of the lawsuit (for example, you were not served properly), you have two years from the date the judgment was entered against you to make the motion. If you knew about the lawsuit but did not timely respond, you have 6 months to make the motion based upon “excusable neglect”. The horror story I hear all too often is that the judgment is more than 2 years old, the consumer never knew about it, and now nothing can be done about it. The 2-year limit is a law that needs to be changed.
If your motion is successful, the judgment is vacated and you then get to contest the case. When you are able to contest the case, you have a lot more options in terms of how to resolve the case. Settlements of contested cases are usually far better than settlements of judgments. You may even be able to win the case. Either way, the judgment creditor no longer has the ability to levy your bank accounts, garnish your wages, or lien your property. Fitzgerald Campbell has successfully made this motion hundreds (thousands?) of times. Call for a free consultation to learn how affordable this option can be.
2) How do I satisfy the judgment? This means to settle the judgment and have the judgment creditor file a “Satisfaction of Judgment” with the court. Judgment creditors routinely settle judgments for less than the full balance. There are many reasons for this and they certainly are not going to tell you. This is why an experienced attorney makes financial sense. In addition to getting the best settlement of the judgment, you must make sure that the entire judgment is settled. For example, do not make payments unless you have a clear WRITTEN agreement that states exactly how much is to be paid and when. Never enter into an agreement that states something to the effect: “we will review/reassess this payment arrangement in 6 months”. If you are going to pay a judgment, you absolutely must ensure it will, in fact, be paid off and a Satisfaction of Judgment will be filed. This should be done by a lawyer. Fitzgerald Campbell has a very affordable, performance-based program to resolve judgments.
3) Discharging the judgment through bankruptcy. If all else fails, most judgments can be discharged in bankruptcy. Notable exceptions are judgments based upon fraud and elder abuse. If you qualify for bankruptcy and otherwise feel that bankruptcy is right for you, you should consult a bankruptcy attorney right away. Filing a bankruptcy petition will place an automatic stay on the judgment and any enforcement actions.
If bankruptcy is not an option for you, and the judgment is more than 2 years old, the only real option you have is to satisfy/settle the judgment. Until you are able to do that, do everything you can to frustrate the judgment creditors ability to enforce the judgment. For example, do not leave your money in the bank to be attached. Again, Fitzgerald Campbell can provide advice and assistance on what you can and cannot do to avoid judgment enforcement actions.
Greg Fitzgerald, Esq.
Fitzgerald Campbell, A Professional Law Corporation