A "judgment" is a piece of paper that a court issues stating that the creditor (or another plaintiff) has won a lawsuit and is entitled to a certain amount of money. Once the creditor has a judgment against you for a specific amount, that creditor can use methods to collect the money that are unavailable without a judgment.
A creditor can get a judgment against you in any of the following situations:
The judgment must be "entered"—that is, filed with the court clerk—which usually happens a day or two after the judge issues it. After the judgment is filed, the court or the creditor's attorney sends you a copy.
When you get a copy of the judgment, your first step is to understand the amount of money to which the plaintiff is entitled and what each portion represents. Keep in mind that the judge might have knocked off some money in response to a defense or counterclaim you raised.
A judgment usually consists of the following components:
Depending on the state, a creditor may have from five to as many as 20 years to collect a court judgment. In addition, in most states, the judgment can be renewed for a longer time, and in some states, indefinitely, if it isn't collected during the original period. So, the creditor could have an unlimited amount of time to collect a judgment.
Sometimes a creditor gets a judgment against you in a state where you don't live. This can happen if you've moved since the debt was incurred, if you signed a contract in another state, or if the contract specified another state for suing to enforce the contract and you weren't able to get the location changed. Or, you might own property or have assets outside the state where the judgment was obtained. The creditor can go into court in the state where you now live or have assets and register the original out-of-state judgment. The creditor then has the right to use all the judgment remedies available in the state where you now live or have assets (the second state).
If you need help responding to a lawsuit for nonpayment of a debt, consider hiring a lawyer. But keep this in mind: If it costs more to hire a lawyer than what the creditor seeks in the lawsuit, it probably doesn't make sense to seek an attorney's assistance.