Settlement after judgment

[rogue22]

Just curious if anyone has any success settling with creditor/law firm after they already got a judgment against you? I know it is possible, but its up to the creditor whether they want to accept a settlement of not.

If anyone did settle after judgment, was the settlement amount the same as what they offered pre-judgment or was it a higher amount?

[Freddy03]

From my experience with 2 judgments - settlement offers weren't made after the judgment was awarded.

I'm in FL also.

[rogue22]

Well I know its not something that the creditor will randomly offer, we will have to approach them about it at this point.

[Freddy03]

From my experience with 2 judgments - settlement offers weren't made after the judgment was awarded.

I'm in FL also.

I should have said they weren't offered. I asked for them and they were declined. It was either pay the judgment in full or we will garnish your wages and levy your bank accounts.

[rogue22]

Oh ok. In our situation, the judgment is against the person in our family that can claim Head Of Household status preventing garnishment of wages and bank (for 6 months). Our car isn't valuable enough for them to take so really theres nothing for them to get out of us. Our cash that we want to use to settle with them is fully and legally protected from BK and judgment. If they don't want to settle then we'll just file BK so its in their best interest to settle.

Thanks for your comments.

[justbroke]

Why would a creditor settle after a judgment? There is no reason to since they have 20 years to collect and attach their judgment to any property that you may have. They can also start garnishing with a court order. They can get the full amount of the judgment.

Perhaps if you're not working or they can't garnish (for head of household reasons), perhaps they'd settle. But, if you're working and they can get 25% a week... they could be less likely to settle. You'd have to make your offer appear better for them in the long run. They are going to want at least their court and collection costs and probably 50% of the actual debt. That could still be substantial.

Additionally, this can attach to assets. So if you own a car, trailer, or boat, you could have some issues... unless your exemptions cover that as well.

We would really like to know how this works out for you and how the creditor responds, now that they have a judgment.

BE VERY CAREFUL with your understanding of Head of Household! It is not "unlimited". It's only up to a certain amount in Florida. Head Of Household only excludes the amount over $750/week in disposable earnings. If you make less than maybe $50K a year, you are more than likely garnishment-proof, if you have a claim of Head of Household (HOH). (The $50K is not precise... I tried to take into account taxes and other non-disposable income.)

While you may not make more than $750/week, I want other readers to be aware that the HOH exemption in Florida is not for unlimited income.

I would also be cautious with ANY money in the bank. Unless the bank is exempt, it could be levied. This can go on for 20 years.

[Freddy03]

Oh ok. In our situation, the judgment is against the person in our family that can claim Head Of Household status preventing garnishment of wages and bank (for 6 months). Our car isn't valuable enough for them to take so really theres nothing for them to get out of us. Our cash that we want to use to settle with them is fully and legally protected from BK and judgment. If they don't want to settle then we'll just file BK so its in their best interest to settle.

Thanks for your comments.

The HOH exemption has to be approved by the judge. While you are waiting for your HOH exemption hearing date your wages can be and will be garnished (if a writ of garnishment was filed). This is what happened to us. I'm still waiting to get our garnished wages back almost 2 months after I've filed Ch. 7.

And in Florida judgment creditors can levy bank accounts without notice.

[rogue22]

Freddy03,

Its my understanding that you cant file for HOH exemption until a creditor tries to garnish, right? Could you please provide me details on how you went about filing for HOH status?

I did realize that they could still garnish while filing for HOH exemptions, but I assumed it would only be a month's worth of garnishment by the time we got the HOH approved. Correct me if im wrong, but doesn't it have to be returned after HOH is approved?

Did they go after wage garnishment first or bank levy first, or both at the same time?

[Freddy03]

Freddy03,

Its my understanding that you cant file for HOH exemption until a creditor tries to garnish, right? Could you please provide me details on how you went about filing for HOH status?

I did realize that they could still garnish while filing for HOH exemptions, but I assumed it would only be a month's worth of garnishment by the time we got the HOH approved. Correct me if im wrong, but doesn't it have to be returned after HOH is approved?

Did they go after wage garnishment first or bank levy first, or both at the same time?

I filed the HOH affidavit before the writ was issued because this is what I was told by my first BK attorney (not my attorney now for obvious reasons..lol) After I saw the writs issued for both DH and myself I called the clerk of courts and was told the proper way of filing the affidavit. So I filed another one and requested a hearing. 4 weeks went by and no response from the judge. DH's wages were garnished during this time. My wages would have been garnished also but they sent the writ to a wrong address so my employer never received it. I filed Ch 7 on the 5th week b/c they issued a bank levy request.

They continued to garnished DH's checks up until last week. Almost 7 weeks after I filed BK. Now I'm waiting to get that money back.

I have 2 judgments. The one I have mentioned was very aggressive the other judgment hasn't budged since it was awarded.

Good Luck!

[rogue22]

Thanks for posting Freddy03!

[shark66]

My wife was offered a 25% settlement on a three-or-four-year-old judgment. The first offer was 50% after two years.

We are NOT in FL and she's as collection-proof as anyone. The amount in questions is something around $11K.

If the judgment holder sees that there's no movement of any kind on your credit report and nowhere to collect from, they *might* act as described...

As always, YMMV.

Good luck to us all.

[DYLAN150]

I had a judgment collector tell me that after 3 years most judgments are never collected. So why not settle for 25 percent. After 5 years those numbers go way down.

[jacko]

If Judgments are never collected after three years, why bother? If you settle, than you have a tax bill afterwards. My rational is that a judgment sticks around on your credit report for 7 years if I am not mistaken and the damage is done. Settling does nothing to eliminate it from your CC report but just resets the clock.

I had a judgment collector tell me that after 3 years most judgments are never collected. So why not settle for 25 percent. After 5 years those numbers go way down.

[justbroke]

If Judgments are never collected after three years, why bother? If you settle, than you have a tax bill afterwards. My rational is that a judgment sticks around on your credit report for 7 years if I am not mistaken and the damage is done. Settling does nothing to eliminate it from your CC report but just resets the clock.

A judgment stays on your credit report in the "Judgments" section for 10 years, not seven years. Additionally judgment creditors, in most states, can renew a judgment before the expiration of the 10 years, for 10 more years.

This does not mean that the judgment (debt) won't be sold to yet another junk debt buyer (JDB) who will hound you for 10 more years.

Settling could be worth it for the judgment creditor if they see that the odds of "EVER" being paid -- in 20 years -- are slim to known. However, it is likely that this debt was already sold before judgment and that this judgment creditor is a JDB that paid pennies on the dollar anyhow.

[fox13weather]

Why would a creditor settle after a judgment? There is no reason to since they have 20 years to collect and attach their judgment to any property that you may have. They can also start garnishing with a court order. They can get the full amount of the judgment.

Perhaps if you're not working or they can't garnish (for head of household reasons), perhaps they'd settle. But, if you're working and they can get 25% a week... they could be less likely to settle. You'd have to make your offer appear better for them in the long run. They are going to want at least their court and collection costs and probably 50% of the actual debt. That could still be substantial.

Additionally, this can attach to assets. So if you own a car, trailer, or boat, you could have some issues... unless your exemptions cover that as well.

We would really like to know how this works out for you and how the creditor responds, now that they have a judgment.

BE VERY CAREFUL with your understanding of Head of Household! It is not "unlimited". It's only up to a certain amount in Florida. Head Of Household only excludes the amount over $750/week in disposable earnings. If you make less than maybe $50K a year, you are more than likely garnishment-proof, if you have a claim of Head of Household (HOH). (The $50K is not precise... I tried to take into account taxes and other non-disposable income.)

While you may not make more than $750/week, I want other readers to be aware that the HOH exemption in Florida is not for unlimited income.

I would also be cautious with ANY money in the bank. Unless the bank is exempt, it could be levied. This can go on for 20 years.

There is no limit to the head of household exemption in Florida. Even if you make a $10,000,000 a week and you are head of household then your wages are exempt.