When a creditor obtains a judgment against you, it can feel overwhelming. The pressure to settle quickly may lead to decisions that are not in your best interest. A judgment settlement can be an effective way to resolve debt and regain control over your finances, but only if it is handled carefully. At Fitzgerald & Campbell, we help clients avoid the most common mistakes that can turn a manageable settlement into a long-term financial burden.
Mistake 1: Settling Without Understanding the Judgment
One of the biggest mistakes debtors make is entering a settlement agreement without fully understanding the judgment itself. A judgment is more than just an acknowledgment of debt—it can include interest, attorney’s fees, and court costs. If you are not clear about the total amount owed, you may agree to pay far more than necessary.
How to avoid this mistake:
- Obtain a copy of the judgment and review it thoroughly.
- Ask for an itemized breakdown of the debt, including interest and fees.
- Consult a debt protection lawyer to confirm the actual amount you should be negotiating.
Mistake 2: Ignoring Interest and Additional Costs
Many debtors believe that settling the judgment means paying only the original debt amount. However, judgments often accrue post-judgment interest, which can significantly increase the total balance. If this isn’t addressed during negotiations, you may find yourself paying more than expected.
How to avoid this mistake:
- Confirm whether the creditor is adding interest to the judgment.
- Negotiate for a lump-sum settlement that halts further accrual of interest.
- Make sure the settlement agreement clearly states the final amount owed and confirms that no additional interest will be added.
Mistake 3: Not Getting the Agreement in Writing
Verbal agreements hold little weight in judgment settlements. If a creditor or collector promises a reduced balance but you don’t have it in writing, you could end up still responsible for the full judgment.
How to avoid this mistake:
- Insist on a written settlement agreement signed by both parties.
- Ensure the document specifies the payment terms, total settlement amount, and confirmation that the judgment will be satisfied upon payment.
- Keep copies of all communications and signed agreements.
Mistake 4: Overextending Financially
Many debtors agree to payment plans that are unrealistic for their financial situation. Missing even a single payment may void the settlement agreement, leaving you vulnerable to renewed collection actions, wage garnishments, or bank levies.
How to avoid this mistake:
- Be honest about what you can afford before committing to a settlement.
- Favor lump-sum settlements when possible, as they often allow you to pay less overall.
- If a payment plan is necessary, negotiate manageable monthly payments and ensure they are documented in the agreement.
Mistake 5: Failing to Confirm Judgment Satisfaction
Even after paying a settlement, some debtors forget to confirm that the creditor has filed a “Satisfaction of Judgment” with the court. Without this step, the judgment may still appear as active, damaging your credit and leaving you vulnerable to further collection attempts.
How to avoid this mistake:
- Request a written confirmation of payment in full from the creditor.
- Follow up with the court to verify that the Satisfaction of Judgment has been filed.
- Keep copies of all payment records and court documents for your files.
Mistake 6: Negotiating Without Legal Help
Creditors and debt collectors know the system well—and they often take advantage of unrepresented debtors. Without guidance, you risk agreeing to unfavorable terms that could have been avoided.
How to avoid this mistake:
- Work with a debtor protection lawyer who understands judgment settlements.
- Allow your attorney to handle negotiations on your behalf to secure fair terms.
- Rely on legal advice to protect your rights and prevent future collection actions.
Final Thoughts
A judgment settlement can provide financial relief, but only if it is done correctly. By avoiding common mistakes—such as failing to understand the judgment, ignoring interest, or agreeing to unrealistic payment plans—you can protect your financial future. At Fitzgerald & Campbell, we help individuals navigate judgment settlements with confidence, ensuring that their rights are protected and that settlements are both fair and enforceable.
If you are facing a judgment and considering settlement, don’t go through it alone. Contact Fitzgerald & Campbell today to discuss your options and let us help you secure a solution that works for you.
If you want help understanding your options or guidance for your next steps, reach out today at (844) 431-3851.