DEFINITION of 'Judgment'

A judgment is 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 non-monetary. 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 if it is unpaid.

BREAKING DOWN 'Judgment'

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 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.

Examples of Judgment Situations

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.

RELATED TERMS
  1. Judgment Lien

    A judgment lien is a court ruling that gives a creditor the right ...
  2. Default Judgment

    A default judgment is a binding judgment issued by a court for ...
  3. Satisfaction and Release

    When a debt that is due under a court judgement has been paid ...
  4. Declaratory Judgment

    A declaratory judgment is a court judgment that outlines the ...
  5. Charging Order

    A charging order is a court-ordered creditor lien on the distributions ...
  6. Appeal Bond

    An appeal bond is an amount of money supplied by the appellant ...
Related Articles
  1. Personal Finance

    Fighting Back Against Collection Lawsuits

    There are still options available to those being pursued by a creditor.
  2. Investing

    Credit Reporting Policy Changes Mean Your Score FICO Score May Go Up

    The major credit reporting bureaus have decided to leave out information on liens and civil judgments.
  3. Retirement

    How to protect your retirement from lawsuits

    Getting sued is one of those things that no one really plans on. Be proactive and make sure your hard-earned retirement is safe from lawsuits.
  4. Personal Finance

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  5. Insurance

    The Advantages of Umbrella Liability Insurance

    Don't let unforeseen lawsuits threaten your bottom line. Consider purchasing an umbrella policy.
  6. Financial Advisor

    3 Things to Consider When Renting By the Room

    Although renting by the room can increase returns on rental property, it does come with a few caveats.
  7. Personal Finance

    Debt Settlement Arrangements And Your Credit Score

    The debt settlement process is not for everyone and can further damage your credit score. However, it can prevent the debt from being sold to a collection agency, who may only accept payment ...
  8. Investing

    Are You A Good Tenant?

    Landlords are looking for specific factors that are perceived to make up good tenants - do you fit the profile?
  9. Personal Finance

    How to Read Your Consumer Credit Report

    Learning how to read your consumer credit report is vital, as it includes important information about your credit history.
RELATED FAQS
  1. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... Read Answer >>
  2. How can a creditor improve its Average Collection Period?

    Read about some of the ways that a business can improve its accounts receivable management practices to shorten its average ... Read Answer >>
Trading Center