Settling Credit Card Judgments?

Question

In jan 2005, I charged off ~62K with Amex who issued a judgment. The statute of limitations for my state is 5 years, and I am debating whether or not to attempt to settle with Amex. My understanding is that while the judgment can remain and be renewed, it will no longer appear on my credit as of Jan 2012 (7 years). I'm already about half way through and therefore I'm curious what the disadvantages are of never repaying Amex.

Any help would be appreciated.

Answer 1

Not too sure of your question.  First of  all, Amex does not issue the judgment, a court of law does that.  Did they sue you in court and win a judgment.  If they did, then as in most states the judgment can be renewed every 10 years.

They can and will wait untill you have some property, bank funds or other assets they can attach.  If they have not garnished your wages, then  your state must be one that does not allow for garnishment or in some states, the sole provider is exempt from garnishment.

As to your credit report, hate to say it but this is the rule

Running of Reporting Period - Section 605 [15 U.S.C. § 1681c]

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

Hope this answers your question

Answer 2

Once a judgment has been issued the original SOL no longer matters, it is the SOL of the judgment.  If you are in a state where the judgment can be renewed they can keep coming after you for it.  In other words don't think you will "never" repay AmEx.  They may eventually come after you.  Not only for the 62K but the interest that has been building since then.

Depending on your state they can garnish your wages, attach any bank account, or place a lien on any real property you may own.  For this amount of money they WILL look at these options.

So if you have the ability to repay it won't do anything to extend the listing on your credit report.  You also won't have this hanging over your head.  For this amount of money you may want to hire a lawyer who may be able to negotiate a lower settlement for you.

Answer 3

As the previous answers state...you have an ugly problem.

The good news...judgments only last on your credit report for 7 years, beginning from the date they were issued.

The bad news....just because a judgment is no longer on your report, does not mean the SOL has expired and you don't have to pay.  

In most states, there is a separate "SOL" for judgments.  The "judgment creditor" has only a certain amount of time to collect on their judgment.  Once it expires they can no longer collect.  But in may states, the creditor is allowed to go back to court and renew the judgment for another term.  In effect, they can keep the judgment active for a very long time.  By trying to ignore the debt, you are hoping the creditor simply forgets to return to court and get the extension.

For $64k, I can pretty much guarantee they will not forget.  and during all of this time the interest will continue to be added on.  

Your credit will look good in 7 years, but you will never get out from under this debt.

Answer 4

If you have a judgment entered against you, then the Statute of Limitations is inapplicable. The SOL is a limit on the time they can file suit. A judgment means they have already sued you and won.

The judgment will haunt you until it is satisfied. It can be renewed over and over and over. The reporting time for it should be the least of your concerns at this point...especially for a relatively large amount like yours.

The biggest disadvantage you face is that they can start executing the judgment against you tomorrow if they want. That means they start taking things away from you until you have paid them off. And that threat does not go away.