What Types Of Liens Are Seen As Good And Which Are Bad For My Credit
Creditors that allow purchases to be made through financing often require property to be pledged against a credit account. This property is known as collateral. Through the use of collateral, creditors establish a priority interest in the asset used to back the loan or line of credit. If you default on your repayment obligation, the creditor can place a lien on your property. Liens come in a number of forms under three broad categories: consensual, statutory, and judgment liens. But does having a lien affect your credit? The answer is it depends on which types of liens.
How Do Creditors Find Your Assets
Florida debt collection laws provide judgment creditors numerous means to find information about a debtors income and assets. Discovery in aid of execution in Florida refers to the legal process by which a judgment creditor finds debtor assets that may be subject to collection of a money judgment.
A creditor can find out about a debtors financial assets by using:
Tip: Asset protection planning is rarely about trying to hide assets from judgment creditors. Instead, it is more about using legal methods to protect those assets from creditors even after the creditor discovers them.
How Are Judgments Collected
Once you have a judgment against you, the plaintiff may be able to collect the money in several ways:
- Wage attachments or garnishments: The creditor can contact your employer and request that a portion of your paycheck gets sent directly to the creditor.
- Bank account garnishment: The creditor may be able to contact your bank and have money withdraw from your bank account.
- Property liens: The creditor may be able to add a lien on your property, such as a home. If you try to sell or refinance your home, money may be redirected to pay off the lien holder.
- Seizing and selling assets: In some cases, the creditor may be able to ask a local sheriff to take your personal property and sell it to repay the debt.
Your case, federal law, and state laws can impact the creditors options. Youll also be left with some money for basic living expenses, and certain types of income may be exempt from garnishment. But even those forms of income could be garnished if you owe federal student loans or child support.
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Technology And Social Media
Social media has made it easier than ever for creditors to discover the nature and location of assets. People often refer to their assets and income in social media discussions. Social media is a revealing source of information about a debtors finances and things the debtor may have done to evade judgment collection.
Public Records Could Plague Your Credit For The Better Part Of A Decade
Even if you repay the money you owe, public records with negative information typically remain on your credit reports for seven to 10 years.
Public records with adverse information may even occasionally wind up on your credit reports by mistake. According to a 2012 study by the Federal Trade Commission, one out of five consumers had an error on at least one of their three credit reports that was corrected by a credit reporting agency after it was disputed.
The good news is, in some cases, you may qualify for relief.
Experian®, Equifax® and TransUnion® have begun removing unverifiable public records from about 12 million credit reports.
The three major consumer credit bureaus recently adopted stronger public record data standards for consumer credit reports, requiring tax liens and civil judgments to include your name, address and either Social Security number or date of birth.
Millions of old public records dont contain all of this information, so the credit bureaus are removing them from consumer credit reports.
Theyre also removing medical collection accounts that have been or are being paid by insurance.
If you spot an error or an unverifiable public record that doesnt belong on your credit report, Credit Karma may be able to help you dispute it. And if all else fails, we can show you ways you can rebuild your credit.
Just remember, youre not alone. Were here to help.
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File A Motion Appealing The Original Ruling
Remember how there are four different types of judgements? The type that comes into play in the world of appeals is a vacated judgement. When you file to appeal the original ruling of the civil judgement, this would make the judgement vacated.You can appeal the ruling if the original creditor who sued you didnt follow proper protocol. Also, if the debt is older than your states statute of limitations, you are subject to having the debt overturned. If you find yourself in either one of these situations, you may just be in luck to get the judgement removed from your credit report.However, as with anything to do with the courts and the law, you may want to consider getting legal counsel. Obviously, youll want to weigh the pros and cons for your unique situationif its going to cost you more to hire an attorney than to pay the debt, then it may not be in your best interest. Also, If the debt is old and predates the statute of limitations, you wont need a lawyer to appeal as this is an easy removal.
Three: Testing And Final Approval To Report Evictions
Lastly, well help you assemble your input file using the File Layout Template tab in your Property Management Reporting package. Please populate all necessary fields within your simple reporting template. Youll send your data in this format in all future transmissions.
You will submit your initial test file using the connectivity path established by your Datalinx representative. This will ensure that the Datalinx servers receive your data securely.
Once received, Datalinx will perform a series of tests to make sure your data is valid. Well also make sure your data adheres to all defined rental data requirements. We perform these tests to be absolutely sure your data will always arrive on time and accurately. When we approve your transmission, you can begin reporting your tenants data in our production environment. If concerns or issues are present your Datalinx team member will work with you to resolve them.
Please contact your Datalinx rep or the support team with any questions or concerns.
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What To Do When You Cant Pay Back A Debt
You should do everything within your power to avoid letting a debt go unpaid. Otherwise youll risk significant damage to your credit scores and a major blemish on your credit reports for years to come.
However, if youre facing a financial challenge, such as extreme medical debt or an abrupt loss of income, and find that you cant pay the debt, that doesnt automatically mean the collection agency has a right to take everything you own. In the worst-case scenario, the agency will try to garnish your wages or seize your property. These extreme actions are only possible, however, if the contract you signed with the original creditor and state law allow for them.
The federal Fair Debt Collection Practices Act regulates the means and tactics that debt collectors may use to entice consumers to pay. Its important to know what kind of conduct is allowed, so you can report and avoid debt collectors who violate the law.
For example, collection agencies cannot misrepresent themselves, the amount you owe or the actions they plan to take to get you to pay. There are limitations to the collectors ability to seek remediation through the courts, as well as how they may add collection fees.
The best thing to do if you are ultimately unable to pay your debt is to seek legal help. If you have multiple accounts in collections and the totals are well beyond your ability to create a realistic payment arrangement, you should consult with a bankruptcy attorney to discuss your options.
What Should I Do Next Time If A Debt Collector Sues Me
If you get sued, you will need to pay the debt quickly or appear before a judge in court. The worst thing you can do is ignore the lawsuit. However, thats precisely what most people do, so usually, the creditor wins by default as the defendant doesnt show up for court.
If you dont show up or lose your case in court, a default judgment will be issued against you. Typically, you will be penalized by having a tax lien placed upon your house or having your wages garnished.
In some cases, you may even be forced to forfeit your belongings. These side effects are even more severe than the damage done to your credit score, so you really need to address the lawsuit, get legal help, and show up in court. Otherwise, you have a long, hard road to financial recovery ahead of you.
It never hurts to talk to a legal professional ahead of time to explore your options. But, at the very least, you need to attend your hearing, so you dont automatically give up your rights to a fair trial.
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Collection By Other Federal Agencies
United States federal agencies, such as the Federal Trade Commission , sometimes sue individuals in federal court for money damages and fines for violation of federal rules and regulations. Frequent examples are Federal Trade Commission suits against telemarketer firms or violators of anti-trust laws, or suits by the Securities and Exchange Commission for violation of investment regulations. The federal governments collection of judgments is different, in some respects, from a private creditors collection of a judgment for damages.
The Federal Debt Collection Procedures Act provides the federal government tools to collect debts owed to government agencies. The Act has separate subchapters dealing with pre-judgment remedies, post-judgment remedies, and the reversal of fraudulent transfers. The U.S. governments post-judgment collection tools are comparable to state law collection remedies and include judgment liens on real property, garnishment of accounts and debts, and levy on personal property.
In addition, some federal agencies, such as the IRS or the SEC, have statutes that provide enhanced collection procedures for debts owed to their agency.
Filing An Income Execution
In addition to a lein on personal property, a Judgment Creditor may also use other enforcement methods to collect a debt. The Creditor can file an Income Execution or wage garnishment to obtain a percentage of the Debtor’s earnings to apply to the Judgment. The judgment creditor may contact the Sheriff’s Civil Department for the procedure to file an income execution or wage garnishment. Again, as with the procedure for seizing personal property, the Creditor will need to inform the Sheriff about certain information, namely, the Debtor’s employer, the employer’s address and wages of the Debtor. This information can be obtained by requesting an Information Subpoena from the City Court Clerk. Additionally, a Transcript of Judgment must be filed with the County Clerk before the Sheriff will proceed to enforce a judgment by income execution.
If a Debtor files for bankruptcy during the collection proceedings, then all further collection efforts cease until the Debtor is released from Bankruptcy Court. The Creditor should contact the trustee in bankruptcy to determine if the debt will be paid or discharged by the Bankruptcy Court.
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Where Delinquent Debt Goes: Third
When you cant pay your debt, most creditors follow a similar process to increase their chances of persuading you to pay. One of the tools at their disposal is selling your debt to a third-party collection agency.
When a debt has been purchased in full by a collection agency, the new account owner will usually notify the debtor by phone or in writing. Selling or transferring debt from one creditor or collector to another can happen without your permission. However, it typically doesnt happen without your knowledge.
If you receive a debt validation letter, you may want to contact a not-for-profit consumer protection organization that can help you navigate the collections process, as it can get complicated and lengthy. For example, if a collector is unable to make satisfactory arrangements with a consumer after a few months, the individual debt may be bundled with many others and sold to another collection agency. That process can be repeated many times over, even beyond the applicable statute of limitations for the consumers debt.
What Is A Civil Judgment
Also known as a default judgement, a civil judgement occurs if a creditor sues you for nonpayment and wins their claim against you. The suing creditor can be anyone ranging from a credit card company, utility company, bank or other type of lender.
Additionally, if you ignore or fail to answer the lawsuit in a timely manner you can also have the judgement entered against you. Not responding is a default loss in the court of law. Most of the time all the creditor wants is to hear from youwell, and for you to give them your money, of course.
Judgments allow debt collectors a stronger ability to gouge you for debt. It opens the door for opportunities such as wage or bank garnishments or even the placement of a lien on your home or property.The reality is, that while a filed judgement is a big deal, they are actually among one of the easier to remove remarks from your credit. This is because the National Consumer Assistance Plan has consistently made it more difficult for credit reporting companies to post-civil judgements on your credit report.
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Do Judgments Expire In Texas
Judgments awarded in Texas to a non-government creditor are generally valid for ten years but they can be renewed for longer. If a judgment is not renewed, it will become dormant.
You can attempt to revive a dormant judgment in order to continue to try and collect the debt. However, you generally only have two years in which to try and revive a dormant judgment. See the resources below for more information.
What To Do About A Judgement Against You For Credit Card Debt
If a credit card company gets a court judgment against you for unpaid credit card debt, you need to prepare for the creditors attempts to collect the judgment. Know that a credit card judgment is not a criminal matter. It is not illegal for you not to pay a credit card company, and the courts cannot put you in jail if you do not pay the judgment. The courts credit card judgment also does not automatically take your money or your future earnings. It is up to the creditor to use legal tools to collect money from you to satisfy its judgment.
Often, a creditor will not make any attempt to collect a small judgment because the legal costs of collection are greater than the creditors probable recovery. Also, most court judgments do not reimburse the creditor for its own legal fees incurred in trying to collect the judgment.
Some people faced with a credit card judgment immediately think they will have to file bankruptcy. This is a mistake. The judgment creditor has more leverage in bankruptcy court, and bankruptcy law strips some of a debtors asset exemptions. Bankruptcy should be the debtors last resort.
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Filing A Lien Against Real Property :
As indicated above, a Judgment from City Court may be levied only against personal property of the Judgment Debtor. By obtaining a TRANSCRIPT OF JUDGMENT for a fee from the City Court and then filing or docketing that Transcript in the County Clerk’s office , a Creditor creates a lien against any real property, that is, real estate, the Debtor owns in the county. If the Debtor should move or if the Debtor owns real property in another county, the Creditor may obtain a Transcript of the Judgment from the County Clerk’s office and file it in another county within New York State. Once a Transcript is filed with the County Clerk, there is a public record of the Judgment against the Debtor which could affect the Debtor’s credit rating or ability to borrow money. A Judgment against the Debtor remains as a lien against real property for a period of ten years, renewable for an additional ten years.
The Creditor should also be aware that once a Transcript of Judgment is filed with the County Clerk, any future matters concerning the enforcement of the judgment become the jurisdiction of the County Court, not the City Court. The only proceeding which can be initiated in the City Court after the filing of the Transcript is for the issuance and enforcement of an Information Subpoena.
Get The Court To Validate The Judgment
Start by contacting the court directly. This means you need to actually write a validation request letter to the court that issued the civil judgment. The purpose is to have them verify that the judgment, and all the relevant details listed on your credit report, are accurate.
If the court cant do this or simply doesnt bother, as is often the case, you can request to have the listing removed by the credit reporting agencies. Under the Fair Credit Reporting Act , a credit bureau must remove any information that cannot be verified. Just be sure to keep copies of all your correspondence sent and received, so you can back up your case.
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Getting A Release Of The Judgment
The ultimate goal in resolving any judgment is to get a release. This means that the creditor is releasing you from any and all liability. To get a release the creditor typically must agree to whatever amount you are paying them to resolve the judgment. As a result, many judgment creditors are difficult to deal with. However, if you have a lump sum payment available, the creditor may be willing to take the payment in exchange for a release.