Credit card judgments acknowledge that a debt is outstanding and spells out the way in which the debt may be recovered. This often takes place when a credit card cardholder has missed monthly paments and has not made an effort to work with the credit card provider to bring the account current.

If you would like to contain the situation before it gets out of control, call the credit card provider and explain your situation. Most credit card providers are willing to work with their cardholders. It would be best to try to come to a payment arrangement in order to bring your account current.

If you do not make arrangements with the credit card provider, your debt may wind up with a collection agency. At this point, you are no longer able to negotiate with the credit card provider. Collection agencies, as a rule, don’t like to go to court to collect a debt because it costs them time and money for what to them normally amounts to a very small amount. Collection agencies normally purchase debt for cents on the dollar. Therefore, they will normally be willing to make arrangements with you for a lump sum payment or monthly payments.

If your debt does come before a judge for a credit card judgment, you have the right to appear before the judge and plead your case. If the debt is not yours or if the seizing of the assets would mean serious difficulties for you, the judge may take this into consideration. However, this is viewed on a case-by-case basis.

It is good to know that not all assets may be seized and the judge will ascertain which assets may be used to recover the debt. It is also possible that money may be taken from your bank account, your wages may be garnished (depending upon state law), and a lien may be placed on your real property.

Your credit score will be severely damaged if you obtain a credit card judgment. Also, it will be extremely hard to be approved for any credit products. Your credit history can carry this albatross for up to seven years.

As if this wasn’t enough, this credit card judgment can also affect your chances of future employment or advancement in your current job. Also, searching for reasonable rates on home and car insurance may be affected.

Once the credit card judgment has been issued, do your best to pay the credit card debt off as quicikly as you can. Keep in mind that you can contact the credit reporting agencies after the debt has been paid in full to request that the debt be removed altogether or, at the very least, be revised to a “paid” status.

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This entry was posted on Saturday, January 2nd, 2010 at 3:55 am and is filed under Finance.