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. Deficiency Judgment

    A deficiency judgment is a court ruling against a debtor in default ...
  3. Judgmental Credit Analysis

    Judgmental credit analysis is a method of approving or denying ...
  4. Debtor

    A debtor is a company or individual who owes money also often ...
  5. Charging Order

    A charging order is a court order allowing a creditor to put ...
  6. Business Judgment Rule

    The business judgment rule helps to guard a corporation's board ...
Related Articles
  1. Personal Finance

    Fighting Back Against Collection Lawsuits

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

    How the debt collection agency business works

    Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
  3. Personal Finance

    What Is a Lawsuit Settlement Loan?

    A lawsuit settlement loan is a cash advance for an impending settlement or judgment. There can be pricey strings attached.
  4. Personal Finance

    Debt Collection: Know Your Rights

    Learn about the debt collection process so you know how to handle it if it happens to you.
  5. 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.
  6. Personal Finance

    Spotting Credit-Repair Scams

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

    What Makes Financial Markets Work?

    What makes financial markets efficient might not be what you think.
  8. Managing Wealth

    Protect Your Personal Assets

    A family limited partnership (FLP) can go a long way toward securing your family's property.
  9. Investing

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay. Learn about debt- and corporate-entity-based strategies for protecting your assets.
  10. Managing Wealth

    Top 5 Ways to Protect Yourself Against Problem Renters

    Renting seems like the perfect way to mitigate the costs of an extra home that won’t sell; the intended course of action when a property was purchased for an unbelievable price, or many of the ...
RELATED FAQS
  1. How long does it take for items to show up on my credit report?

    Find out how long missed payments, collections and requests for credit take to appear on a credit report and how often creditors ... Read Answer >>
  2. 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 >>
  3. 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 >>
Hot Definitions
  1. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  2. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  3. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  4. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  5. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  6. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
Trading Center