What does a court judgement mean on my credit file?
Court judgements listed on your credit report indicate a legal action, and a decision ruled against you by a court. As such, the court case would be a result of a financial dispute between yourself and a creditor. Hence, the court outcome would incur a default judgement payment against you. Also, the judgement payment would give the creditor or debt collector enforcement action to force you to pay the debt.
- A default judgment is an outcome of a debt collection process. Consequently, your credit file records the negative result of a court hearing.
- Secondly, the court outcome rules that you owe the money.
- Thirdly, the court can assign legal costs against you.
- Also, the court will apply time limits to the payment of the judgment debt.
- Finally, a court judgement would affect your credit score and credit report and affect any credit applications.
Court judgment information listed on your credit file.
Court outcomes on your credit report indicate similar information as a credit default. However; court results also record the court type, and plaint number (court reference). Court judgements indicate:
- Firstly, various creditor information including the name of creditor and the amount of debt.
- Secondly, current and pending action. As such, court information on your credit file can identify future escalation of credit issues.
- Therefore, it is an indication that a creditor may seek further recovery, such as bankruptcy.
- Finally, will last five years if paid before five years, or seven years if not paid in full.
Typical Court Judgements we see are:
- Australian Taxation Office - Tax Debt Judgement
- Creditor Judgements from a variety of creditors (or debt collectors) such as GE, Lion Finance, ACM Group etc
- Businesses you owe money to that have taken you to court. The court has ruled you owe money, and hence a judgement has been issued.
How can the court force a judgement payment?
There are several ways a court judgment can force payment of monies. As such, once the sentence has been passed; the creditor can apply to the court for:
- Firstly, by Instalment order, is where you pay the debt by instalments.
- Secondly, by Garnishee Order, this allows the court to force payment via direct debiting your bank account. Also, the court can order a garnishee against your income. Plus, the ATO or other creditors can force a garnishee against future invoices by making direct contact with your customers.
- Also, Asset seizure and sale, this is where the court forces a repossession of fixed or moving assets for sale to repay your creditor.
I've paid my debt to the creditor! Why is my Court Judgement listed as unpaid?
Court judgements are outcomes of a court proceeding. Therefore, the creditor doesn't update your credit file directly. As such, the reason for this occurrence is two-fold:
- Initially, a court will record the judgement outcome. As such, the creditor usually needs to attend the court to update the outcome.
- Secondly, when you pay a creditor, they are not the party who updates your credit file as "paid" status. Therefore, to do this, the creditor would need to notify the court. Then, the court would notify the credit reporting agency.
- Consequently, updating your credit file us not usually a creditor process. Therefore, you will need to make contact with the creditor and request the court judgement be updated. Otherwise, obtain a receipt of payment with the correct payment date to provide the court yourself.
- Also, the courts may require a fee for updating the court record.
Notice of Discontinuance
How can you remove court judgements from your credit file? However, the creditor would need to provide a letter of discontinuance. As such, the discontinuance letter can be obtained directly from the court.
However, not all creditors will sign a notice of discontinuance to remove the court judgement.
Each judgement ruling can have a different collection outcome. Hence, the verdict and collection can vary depending on the court, creditor, judge attending to your case, and your attendance.
If you have a pending or current court judgement, you should:
- Assess your risk of bankruptcy and loss of assets.
- Next, find out your available solutions to resolve the judgement debt.
- Finally, obtain legal or financial counselling.
Courts that can assign financial judgements
- initially, Magistrates' Court is used for most minor matters such as traffic offences.
- Secondly, County Court is used for more serious crimes and claims over $100,000.
- Finally, the Supreme Court is used for more serious criminal cases. As such, cases where a judge and jury are required. Also, the court deals with financial matters over $200,000.
Courts that usually don't incur financial outcomes.
- Children's court, this is a court that handles matters related to children. As such, we don't usually see financial outcomes from the children's court.
- Coroners Court, this court investigates matters related to unexpected deaths; or where a body cannot be found. However, we don't see financial or court judgement outcomes from this court.
- Neighbourhood Justice Centre, this is a Victorian court which is associated with the City of Yarra not used for monetary claims.
Related article from Legal Aid Victoria: The Victorian courts and tribunals
Loan Saver Network offers free and confidential debt consultation. Hence, we seek to resolve credit issues with a range of finance products. Plus, we advise on other strategic solutions to minimise risk; and improve your chances of success.
Loan Saver Network recommend obtaining legal advice for any court matter. Consequently, you may use your solicitor or legal aid to offer advice. However, you may also receive financial assistance via a financial counsellor who can advise of your rights to financial hardship.
Related Articles:
- Refinancing solutions when seeking a debt consolidation or bad credit home loan.
- Loans to pay a tax debt when the ATO has listed a court judgement.
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