[matiesse]

Apologies about this long post, but I found it useful. It came from a law firm's site. Unfortunately they assume that the CRA verifies with the court not a 3rd party. Now that would be useful information

JUDGMENTS
Removing a judgment from your credit reports: How to

When a debt is in collections and you are served, you are given about 30 days to object to the filing if you have a cause. If you can prove that the debt is invalid you can get the hearing dismissed. Additionally, if an agency has sued you without giving you the mandatory 30 day notice to dispute the validity of a debt then that is a violation of the Fair Debt Collections Practices Act. But if the debt is yours and you know it then you should contact the JC (judgment creditor) as soon as you are served. You want to avoid the entry of judgment at all costs because it will simply ruin your credit. Call, fax or mail a request to the person suing you and offer a compromise to settle the debt in exchange of dismissing the case.

STEPS:: Three options: Question to the CRA: Dismiss via Settlement: Vacate
There may be several ways to remove a judgment from your credit reports. First is the judgment still legally allowed to be on your credit reports? Look at the SOL- statute of limitations for judgments and if your state allows it to be renewed. If it is still LEGALLY on your credit reports you should dispute it to the credit bureaus before you contact the JC- judgment creditor. It may be deleted without ever paying it! This is because many court records are not verified in time when disputed. The bureau has 30 days to verify the accuracy of an item and to send a request to the courts and to expect a reply within 30 days is a long shot. We all know how slow the courts can be. If the court does not verify the judgment within 30 days, the credit bureau will delete it.

However if the item has been verified as timely and you have no other documentation to prove it is not valid then you can negotiate with the JC to dismiss the judgment in exchange for money. This is a much better rating than a "paid judgment". It tends to indicate that it was dismissed therefore "legally void". This IS a better rating than showing you simply paid it- that means you owed it. Not much of a credit improvement. Make sure when you negotiate with the JC that you put your terms in writing and have the JC sign and date it. This can be used for proof later if the rating doesn't change. Once you agree, the JC will complete a form to dismiss the judgment and file it with the court. All public records are reported to credit bureaus so you should see your new rating in about 30 to 45 days.

Finally, there is a procedure called a "motion to vacate" a judgment. This procedure can be used if you have good cause to believe you were sued in error, were exempt because of retirement or SSI or served improperly. The great news is that about 80% of judgments are awarded in error- you just have to know what to look for. Getting the judgment vacated means it does not stay on your credit and you do not have to pay it so if you think you have a good case for a vacate motion then by all means seriously consider pursuing it. Contact a lawyer about this issue. You can attempt to vacate the judgment yourself or use a lawyer. If you do not know a lot about it, you are better off hiring a lawyer for a few hundred dollars.

Avoid judgments at all costs!!

The statute of limitations (SOL) on judgments is long--very long usually 12 to 20 years and many are renewable (a judgment may be renewed if the creditor files a new suit seeking to renew the judgment prior to the expiration of the original judgment) therefore the judgment could follow you around forever. Even if you pay it you will be stuck with a 'satisfied judgment" for 7 years from date satisfied not filed! This can be a hopeless situation so avoid being sued at all costs. Be sure to always check your SOL for debts if you have been served because if it is expired (and many debts expire in 4-6 years) you can use that to dismiss the case. Many debtors are served everyday for debts and they simply do not show up in court and a default judgment is entered against them- big mistake! Had half of them simply checked their SOL they would have found that the debt may have expired years before but since they did not dispute this, the judgment was awarded. You can use an expired SOL as a solid defense in court against a creditor/collector.
If you are sued- never let a default judgment be entered

You have nothing to lose by disputing the validity of the judgment or even settling it out of court to avoid that nasty record landing on your credit reports. Even if you owe the debt and it is not legally expired under the SOL and you have no claim to vacate it- you should attempt to settle it out of court---before the court date so that it can be set aside. All the JC wants is their money so calling them to work out a settlement is the only smart thing to do. Otherwise you may be forced to pay it later through wage levy or asset liens and not to mention the damage it will have done to your credit