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. Stipulated Judgment

    A Stipulated Judgment is a court decision ordering a debtor to ...
  2. Default Judgment

    A default judgment is a binding judgment issued by a court for ...
  3. Deficiency Judgment

    A deficiency judgment is a court ruling against a debtor in default ...
  4. Satisfaction and Release

    When a debt that is due under a court judgement has been paid ...
  5. Collection-Proof

    Collection proof is a word used to describe a person that has ...
  6. Confession of Judgment

    A confession of judgment is a signed agreement that serves as ...
Related Articles
  1. Insights

    Chevron's Rainforest Controversy Continues (CVX)

    A mediagenic conflict between Ecuadorian activists on the one hand and the oil giant Chevron on the other continues to capture the public imagination.
  2. Financial Advisor

    Build A Wall Around Your Assets

    Learn how to protect your money from lawsuits, creditors and other judgment proceedings.
  3. 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.
  4. 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 ...
  5. Managing Wealth

    How To Reduce Your Debts Without Spending Unnecessarily

    While it is not possible to repay your debts without investing money into the process, you should avoid spending unnecessary sums of cash in the pursuit of a financially liberated future.
  6. 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?
  7. Investing

    Attention Home Buyers: Why You Need a Lawyer

    Property transactions are complex and subject to specific state/local rules. Hiring a lawyer can simplify the process.
  8. Insurance

    When Is Rent Guarantee Insurance a Good Idea?

    Prospective renters are turning to rent guarantee insurance to boost their chances of getting approved by a landlord or management company. Is it worth it?
  9. Investing

    Tips for prospective landlords

    Investing in rental property can generate serious income, but there's more to it than collecting rent. Check out all the pros and cons before you invest in the rental property.
  10. Investing

    5 Tips For First-Time Renters

    Knowing the main points of a lease will make sure you don't sign - and end up paying for - something you don't want.
RELATED FAQS
  1. What types of liens are seen as good and which are bad for my credit?

    Understand what a lien is and what types of liens are most common for individuals, and learn which types of liens are good ... Read Answer >>
  2. Student Loan Creditors Can Garnish Your Money

    The U.S. government and private lenders can garnish your bank account to recover unpaid student loans in multiple ways Read Answer >>
Hot Definitions
  1. Risk Tolerance

    Risk tolerance is the degree of variability in investment returns that an individual is willing to withstand.
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
  4. Federal Funds Rate

    The federal funds rate is the interest rate at which a depository institution lends funds maintained at the Federal Reserve ...
  5. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  6. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
Trading Center