DEFINITION of 'Judgment'

A court order to the loser of a lawsuit to pay the winner a specified sum of money. If someone has been harmed in some way, they will seek to resolve the dispute in court and collect damages by filing a lawsuit. Judgments are usually monetary, but can also be nonmonetary. The judgment might force a contractor to complete a job, for example, rather than pay money. Most of the time, a judgment will be for a sum of money because money is the most appropriate form of compensation for the harm. A judgment, paid or unpaid, will remain on the debtor's credit report for seven years, but it will have a worse effect on their credit score of it is unpaid.


For the winner of a lawsuit, a court judgment is only the first step in getting the money they are owed. Actually collecting the money from the debtor can be a long, arduous and not always a successful process. However, judgments are legally enforceable. So, if the debtor does not voluntarily pay the judgment, the creditor can take steps such as conducting a debtor's examination, seizing bank accounts, putting a lien on the debtor's property or hiring a debt collector.

For example, if a borrower does not repay a loan or a credit card debt, the lender or creditor can obtain a judgment to force the borrower to pay. As another example, a landlord who evicted a tenant for not paying the rent might file a lawsuit to collect the unpaid rent, and if the landlord won the lawsuit, it would result in a judgment against the tenant.

  1. Ombudsman

    An official who investigates complaints (usually lodged by private ...
  2. Restitution Payments

    The payment of punitive damages that are owed as a result of ...
  3. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  4. Perp Walk

    A slang term that describes the practice sometimes employed by ...
  5. Insider Information

    A non-public fact regarding the plans or condition of a publicly ...
  6. Insider Trading

    The buying or selling of a security by someone who has access ...
Related Articles
  1. Retirement

    Build A Wall Around Your Assets

    Learn how to protect your money from lawsuits, creditors and other judgment proceedings.
  2. Home & Auto

    Filling The Gaps In General Liability Insurance

    Standard liability coverage may not be enough. Special needs call for specialized policies.
  3. Options & Futures

    Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street

    From godfathers to perps, familiarize yourself with the "criminal elements" creeping around Wall Street.
  4. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  5. Professionals

    The Basics Of CFP Designation Maintenance

    The workload doesn't end with your exam. Find out how to keep up your CFP credential.
  6. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  7. Options & Futures

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
  8. Home & Auto

    Protect Your Company From Employee Lawsuits

    Understanding employment practices liability insurance is easy, once you know the basics.
  9. Economics

    The 5 Countries That Produce the Most Carbon Dioxide (CO2)

    Learn about the top five countries, China, the United States, India, Russia and Japan, that are the largest contributors to carbon dioxide emissions.
  10. Economics

    Explaining the Tier 1 Leverage Ratio

    The Tier 1 leverage ratio measures a bank’s core capital against its total assets.
  1. How do debt collection agencies make money?

    Debt collection agencies make money by contracting with creditors and collecting money for fees or by buying debt cheaply ... Read Full Answer >>
  2. Does cosigning a loan affect a credit score?

    Cosigning for a loan does not affect a credit score unless the other person defaults on the loan and the cosignor does not ... Read Full Answer >>
  3. How often do mutual funds report their holdings?

    The Securities and Exchange Commission (SEC) requires mutual funds to report complete lists of their holdings on a quarterly ... Read Full Answer >>
  4. How do I find a good personal bankruptcy lawyer?

    While it is not necessary to hire an attorney to file bankruptcy, the rules that govern bankruptcy can be extremely complex, ... Read Full Answer >>
  5. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Full Answer >>
  6. How does FINRA differ from the SEC?

    With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!