George Simons | October 19, 2022
Summary: When you consent to a judgment, the court rules against you. Consent judgment means you acknowledge you owe the creditor money. However, a judgment is still a judgment. The creditor expects you to make consistent payments to the collection firm, and if you miss one of those payments, they may garnish your wages. Use SoloSuit to respond to a debt lawsuit and avoid a judgment against you.
When a debt collector is unsuccessful in securing repayment for the outstanding balance on an account, they routinely decide to escalate the matter to litigation by filing a debt collection lawsuit. If the debt collector prevails in the lawsuit, a judgment will probably be entered against you.
This judgment will then empower the debt collector to access your bank account, along with seizing certain financial and personal assets. There are different judgments that can be entered in a debt collection lawsuit, including a consent judgment.
In this article, we will discuss a consent judgment definition and what to expect when a debt collector files a lawsuit against you for a debt you allegedly owe.
Let's jump right in.
Generally, a judgment is considered an official order entered by a court. The judgment is deemed to be the decision of the court, based upon the facts and evidence presented by both parties involved in a case.
In debt collection lawsuits, there are three main types of judgements that could be granted:
Below, we will break down these different types of judgments a little further.
When a judgment is entered in a debt collection lawsuit, it empowers the creditor or debt collection agency to use advanced collection techniques to recover the outstanding balance owed on a delinquent account.
For example, if a debt collection agency like Asset Acceptance LLC or Cavalry SPV I LLC, establishes in court that you owe $8,000 on a delinquent credit card account, the court hearing the case could very well enter a judgment against you that declares you owe them the $8,000, as well as related costs, interest and legal fees.
Judgment creditors can garnish a portion of your earnings with each paycheck to satisfy the judgment.
When a debt collection lawsuit is filed, it does not mean that the parties stop negotiating. It is quite common for debt collection cases to be resolved after a lawsuit is filed, but before going to trial. If you can reach an amicable agreement with the debt collector on a settlement after a lawsuit has been filed, you may need to agree to a “consent judgment.”
This is where you and the debt collector file a notice with the court that an amicable agreement has been reached to resolve the lawsuit. Should I sign a consent judgment? Both you and the debt collector must sign the consent judgment and file it with the court to be reviewed and approved by the judge. Please remember that the consent judgment is not official unless the judge files and signs it.
The decision on whether to agree to a consent judgment is extremely important and could have significant ramifications on your financial future. For example, let's say you agree to a consent judgment whereby you agree to pay the creditor a portion of what is owed, but not the full amount.
The settlement is agreed upon, but the creditor then asks you to sign a consent judgment to resolve the active collection lawsuit. If you agree to the consent judgment, you effectively request that the judge presiding over the case to enter a judgment against you.
This is extremely risky since the adverse judgment against you could be reported to the three major credit bureaus, and it might torpedo your credit score. Some debt collectors try to circumvent this issue by assuring you they will not report the judgment or inform the credit bureaus.
That is nice, but it does not matter. Why? Because the major credit bureaus do not get adverse judgment data from collection agencies. Instead, they review the judgments entered by courts across the country.
As a result, if a credit bureau discovers a judgment against you, even if it was based on a mutual consent judgment settlement agreement, the credit bureau will add it to your credit report.
Here is a consent judgment sample.
Some exemptions limit the amount that a creditor can take. In some states, such as Florida, Idaho, Oklahoma, Maryland, Ohio, and Utah, exempt income is determined by federal wage garnishment limits–Title III of the CCPA.
A judgment debtor in Alaska, Connecticut, California, District of Columbia, New Hampshire, North Dakota, New Mexico, and Oregon can garnish wages up to 75% of your disposable income or 40 to 50 times the federal minimum wage, whichever is higher.
Three states protect 80-85% of the disposable income of judgment debtors - Massachusetts, West Virginia, and Wisconsin. Wage garnishment is prohibited in Texas, Pennsylvania, North Carolina, and South Carolina.
Avoid having a judgment against you by filing a response with SoloSuit.
There are various avenues for securing a judgment. Most people are familiar with the concept of judgment via trial. This is the forum of litigation most often glamorized on television through programs like Boston Legal and Ally McBeal.
In a debt collection lawsuit, when a collection agency goes to trial against you, they are hoping to secure a judgment from the court after presenting evidence and making arguments at a trial.
Besides a court-entered judgment via a trial, there is the potential for judgment to be entered through a pre-trial motion. Often, this is accomplished through a Motion for Summary Judgment.
A Motion for Summary Judgmnet can be entered by either party (meaning you could file this type of Motion if there is an indication that the debt collection agency lacks sufficient evidence to prevail at trial). At its core, a Motion for Summary Judgment is an argument focused on trying to convince the judge that no material facts are in dispute and, as a result, judgment should be entered without having to proceed to a trial.
For example, you signed a legal loan agreement, made no payments, and have no defense to why you're not paying. The creditor also must convince the judge that it is entitled to judgment as a matter of law. If the judge agrees with the creditor, the judge can enter a judgment against you with no trial taking place. The creditor should not win if there are any material (important) facts in dispute (for example, if you claim you didn't sign the agreement).
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This is generally considered the most common type of judgment entered in debt collection lawsuits. It can be obtained when a defendant (i.e., you) fails to file an Answer to the debt collector's complaint within the stated filing period.
It is important to understand that ignoring the debt collector's lawsuit is never a good idea. Once a default judgment is entered, the debt collector will have the legal ability to seize various assets and even seek to garnish your wages.
If you were unaware that a lawsuit was entered against you, and you lost by default, you can file a Motion to Set Aside Judgment into the case. If granted, this motion will essentially reopen the case and allow you a chance to respond with your affirmative defenses.
A default judgment cannot be set aside (voided or nullified) by a motion unless you think the debt collector entered a judgment against you improperly.
A judge can set aside a default judgment for the following reasons, among others, according to NRCP 60 (b)- (c); JCRCP 60 (b)- (c):
The judge must agree that one of the above reasons applies to your particular situation and that your circumstances warrant setting aside your default judgment.
Depending on the specific reason for your motion, you have a specific deadline for filing a Motion to Set Aside Judgment. You must file within six months if you never received the Summons and Complaint, made a mistake or inadvertently served the judgment, or if any fraud, misrepresentation, or other misconduct occurred on the other side. If the judgment has been satisfied, released, or discharged, you must file your motion as soon as possible.
Below is a summary of key points concerning consent judgments in debt collection lawsuits:
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.
>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate
>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)
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