What Is Satisfaction and Release?
Satisfaction and release is the formal paperwork stating that a consumer has paid the full amount owed under a court judgment. A satisfaction and release proves that they have paid their debt and prevents creditors from trying to recover more money from them. This document states the name of the creditor that has been paid, the date the full or final payment was received, and the name of the debtor who has fulfilled its obligation to the creditor.
If a creditor sues an individual because they have not paid a bill, and the creditor wins the lawsuit, the judge decides how much they must pay the creditor. Once they have met their obligations under the judgment—that is, once they have repaid the creditor what the judge determined must be paid—the creditor should sign a satisfaction and release.
This document, like the original judgment, becomes part of the public court record and should be reported to the credit bureaus so that the defendant's credit report will indicate that they have met their obligations under the judgment. A judgment is always bad for a credit history and will stay on their credit report for seven years, but a paid judgment will hurt their score less than an unpaid one.
How Satisfaction and Release Is Relevant to Credit History
If an individual find themselves delinquent on a debt, they need to keep excellent records of their interactions with creditors, debt collectors, and courts. One problem that can arise is that when their debt becomes so far past due that the original creditor does not believe it can collect, it will sell the debt to a debt collector. If the debt collector cannot collect, the debt may be resold to another creditor, and this process can happen repeatedly. The details about how much is owed, to whom, and from when can get lost during this process, resulting in debt collectors pursuing the debtor for debts they have already repaid, debts that are past the statute of limitations, or debts they never owed in the first place because they really belong to someone else with a similar name or Social Security number.
If a debt is fully repaid and a satisfaction and release is received, the document should be retained in their files along with backup physical and electronic copies made. This way, if a debt collector tries to collect the same debt from them in the future, they can prove they have already paid it. Further, if the old judgment were to reappear on their credit report after seven years, they could use the satisfaction and release to prove to the credit bureau that they paid their debt, and the judgment should be removed from the credit report.