Many people faced with substantial debt feel this way, but disregarding a complaint is the worst thing you can do. First, let’s consider the consequences: if you do not respond within the time specified by your state, the creditor will receive a default judgment. That means that they win the lawsuit due to your inaction and a public record will be made which states that you owe the amount of money requested by the creditor. If the creditor claimed that you owe more than you really do, or calculated the interest incorrectly, there’s little you can do about it once it has been reduced to a judgment.

Another problem is that once a judgment has been filed, it will be reflected on your credit report and negatively affect your credit rating. If the creditor has already reported your lack of payments, and perhaps also sent the debt to a collection company, the judgment will be the third time that your credit has been negatively impacted for the same debt. Avoiding a judgment will prevent your credit from being lowered further.

Finally, in many states, a judgment will allow your creditor to garnish your wages, your bank accounts, or in some places even prevent the sale of your real estate without first paying the amount due. If you are already having a hard time making ends meet, the last thing you need is to have part of your paycheck taken by the creditor before you even see it, or having what little money is in your bank account taken, causing checks to bounce.

So, what can be done to prevent the creditor from obtaining a judgment against you? Your best bet is to hire an attorney. If you cannot afford to pay an attorney, most places have a legal aid society that will represent you after receiving proof that you don’t have sufficient funds to hire a lawyer. (If that isn’t possible, you can represent yourself if necessary, although this should always be considered a last resort.) With some negotiation and compromise, most creditors will agree to accept a reduced amount in payment or may accept payments over an extended period of time.

If a judgment has already been filed in a lawsuit against you, don’t despair; try to get it paid off as quickly as you can. After it has been paid, make sure that a “Satisfaction of Judgment” is filed in your case. A Satisfaction of Judgment is a document that demonstrates that you have paid off the debt reflected by the judgment. The filing of a Satisfaction of Judgment is important because after a judgment has appeared on your credit report, it will not be removed, but it can be improved through a Satisfaction of Judgment proving that you no longer owe the money. Then, chalk the experience up to an important event in your financial education.

Article Written by Kristen J. Welcome