DEFINITION of 'Satisfaction And Release'

Formal paperwork stating that a consumer has paid the full amount owed under a court judgment. A satisfaction and release proves that you’ve paid your debt and prevents creditors from trying to recover more money from you. 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.

BREAKING DOWN 'Satisfaction And Release'

If a creditor sues you because you haven’t paid your bill and the creditor wins the lawsuit, the judge decides how much you have to pay the creditor. Once you’ve met your obligations under the judgment — that is, once you’ve repaid the creditor what the judge determined you had to pay — 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 your credit report will indicate that you’ve met your obligations under the judgment. A judgment is always bad for your credit and will stay on your credit report for seven years, but a paid judgment will hurt your score less than an unpaid one.

If you find yourself delinquent on a debt, you  need to keep excellent records of your interactions with creditors, debt collectors and courts. One problem that can arise is that when your debt becomes so far past due that the original creditor doesn’t believe it can collect, it will sell your debt to a debt collector. If the debt collector can’t collect, your debt may be resold to another creditor, and this process can happen repeatedly. The details about how much you owe, to whom and from when can get lost during this process, resulting in debt collectors pursuing you for debts you’ve already repaid, debts that are past the statute of limitations, or debts you never owed in the first place because they really belong to someone else with a similar name or Social Security number.

So if you pay off a debt and receive a satisfaction and release, keep the document in your files forever and make backup physical and electronic copies. This way, if someone tries to collect the same debt from you in the future, you can prove you’ve already paid it. Further, if the old judgment were to reappear on your credit report after seven years, you could use the satisfaction and release to prove to the credit bureau that you paid your debt and the judgment should be removed from your credit report. 

  1. Stipulated Judgment

    A court order that requires one party to pay another party a ...
  2. Receiver

    A person appointed by a bankruptcy court or secured creditor ...
  3. Creditors' Committee

    A group of people who represent a company's creditors in a bankruptcy ...
  4. Debt Assignment

    Debt assignment is a transfer of debt, and all the associated ...
  5. Cancellation of Debt (COD)

    Cancellation of debt (COD) occurs when a creditor relieves a ...
  6. Debt Collector

    A company or agency that is in the business of recovering money ...
Related Articles
  1. 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.
  2. Personal Finance

    Unemployed? 5 Smart Ways to Get Control of Debt

    When you're unemployed and barely making ends meet, smart debt advice can help you stay on top of your payments and protect your credit rating.
  3. Personal Finance

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
  4. Personal Finance

    7 Tips For The Do-It-Yourself Debt Manager

    Hired gun not in your budget? Learn to be your own credit counselor.
  5. Personal Finance

    Fighting Back Against Collection Lawsuits

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

    What Debt Collectors Can And Cannot Do

    The Fair Debt Collection Practices Act now regulates the actions and behaviors of debt collectors in order to protect you.
  7. Personal Finance

    Outfox the Debt Collector's Hounds

    Dealing with a collection agency is scary if you don't know your rights. We help you take back the power.
  8. Personal Finance

    Will Paying Off Old Debt Boost Your Credit Score?

    Learn why paying down your debts may not always be the fast-track to improving your credit score.
  9. Personal Finance

    5 Things Debt Collectors Are Forbidden to Do

    You may owe money, but you still have rights. Know what debt collectors are forbidden from doing.
  10. Personal Finance

    Fixing Your Credit Score: A Do It Yourself Guide

    Following these five steps can go a long way toward repairing a low score.
  1. If a collection agency buys my debt from another agency, does the debt become 'new'?

    Find out what happens when your debt account is sold from one collection agency to another and the impact on your balance ... Read Answer >>
  2. Do I still owe debt collectors for a debt that's past the statute of limitations ...

    Learn more about the statutes of limitations that govern certain personal debts and why you maintain obligations as a debtor ... Read Answer >>
  3. How will debt settlement affect my credit score?

    Learn how a debt settlement arrangement, though sometimes the best option to eliminate an outstanding debt, can negatively ... Read Answer >>
Trading Center