Once a judgment is paid, whether in installments or a lump sum, a judgment creditor (the person who won the case) must acknowledge that the judgment has been paid by filing a Satisfaction of Judgment form with the court clerk. Doing this makes it clear to the world (and especially credit rating agencies) that the person who lost the case (the judgment debtor) has met the obligation.
If the judgment creditor has also recorded a lien on real property, she or he must make sure the lien is removed. Ask the small claims clerk for more information about how to do this.
If a judgment creditor receives payment in full on a judgment but fails to file a Satisfaction of Judgment form, the judgment debtor will want to send a written demand that this be done. A first-class letter is adequate. If, after written demand, the judgment creditor still doesn't file within the required number of days of the request (usually between 15 and 30–check your local rules) and without just cause, many states allow the judgment debtor to recover all actual damages he or she suffers as a result of the failure (for example, denial of a credit application). In addition, some states will penalize the judgment creditor by requiring a payment of a set amount of money to the judgment debtor.
The Satisfaction of Judgment form should be signed by the judgment creditor when the judgment is paid, and then filed with the court clerk. Don't forget to do this; otherwise, you may have to track down the other party later.
It's easy to get a copy of a Satisfaction of Judgment form. If either party ever needs it (for example, to correct an out-of-date credit report), the court clerk will provide a certified copy of a filed Acknowledgment of Satisfaction of Judgment form. This form proves that the judgment was paid.
Sometimes judgment debtors forget to get the judgment creditor to sign the Satisfaction of Judgment form when they pay a judgment, only to find that they can't locate the judgment creditor later. If this happens and you need the form to clean up your credit record or for some other reason, you can get it if you present the court clerk with proof the judgment was paid. The following documents will help:
My name is John Elliot. On January 11, 20xx, a judgment was awarded against me in small claims court in Ithaca, New York (Case # 1234). On March 20, 20xx, I paid Beatrice Small, the prevailing party, $1,200, the full amount of this judgment [or, if payments were made in installments–"I paid Beatrice Small, the prevailing party in this action, installments of the following amounts on the following dates: _______________ , concluding with a final payment of $________ on March 20, 20xx."â
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