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 If either party ever needs it (for example, to correct an out-of-date credit report), the court clerk will provide a certified copy of a filed Acknowledgment of Satisfaction of Judgment form.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:

• A canceled check or money order written subsequent to the date of the judgment by you, the judgment debtor, for the full amount of the judgment, or a cash receipt for the full amount of the judgment signed by the judgment creditor after the date the court awarded judgment.
• A statement signed by you under penalty of perjury stating all of the following:
  • The judgment creditor has been paid the full amount of the judgment and costs.
  • The judgment creditor has been asked to file an Acknowledgment of Satisfaction of Judgment form and refuses to do so or can't be located.
  • The document attached (for example, the check or money order) constitutes evidence of the judgment creditor's receipt of the payment.

Sample Statement