What Is Judgment?

Judgment is a court decision, spelled out in a court order, that adjudicates a dispute between two parties by determining the rights and obligations of each party.

Key Takeaways

  • Judgment is a court decision that settles a dispute between two parties by determining the rights and obligations of each party.
  • Judgments are classified as "in personam," "in rem," or "quasi in rem."
  • Judgments are usually monetary, but can also be non-monetary, and are legally enforceable.

Understanding Judgment

Judgments are classified as:

  • In personam is the most common type of judgment that holds one entity personally liable to another.
  • In rem imposes a general liability over a thing, such as property, but no personal liability.
  • Quasi in rem determines the rights of an individual, rather than all parties, in a particular thing, such as property.

Judgments are usually monetary, but can also be non-monetary.

  • Monetary judgment: If someone has been harmed in some way, they will seek to resolve the dispute in court and collect damages by filing a lawsuit. The resulting court judgment orders the loser of that lawsuit to pay the winner a specified sum of money.
  • Non-monetary judgment: A contractor may be forced to complete a job rather than settle the dispute by paying 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.

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.

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.