When a judgment is filed against you, a court has formally entered an order on the public record declaring that you owe a specific debt, and the creditor now has legal authority to collect it using wage garnishment, bank account levies, and liens on your property. The judgment itself moves no money. It converts a disputed claim into an enforceable obligation that will sit in the record for years — ten in most states, longer in some, and renewable before it expires.
How the Judgment Got There
Most collection judgments are defaults. If you were sued and didn’t respond within the deadline, the court ruled for the creditor without hearing your side. Federal court gives you 21 days after service to file a response; state deadlines usually fall between 20 and 30 days. Roughly 70 percent of defendants in debt collection cases never respond at all, which is why default judgments dominate.
The other path is a contested case, where you answered the lawsuit and the matter moved through litigation to a decision or settlement. The distinction matters later: a default judgment can sometimes be set aside on grounds that aren’t available after a contested loss, especially if you were never properly served.
What Changes the Moment It’s Filed
A ruling becomes enforceable only when the clerk formally enters it. Before that, the creditor cannot garnish, levy, or lien. After it, those tools open up, and the judgment becomes a public record that landlords, lenders, and employers running background checks can find.
A filed judgment also stays alive for a long time. Ten years is the most common state duration, with some states as short as five and others as long as twenty. Creditors can renew before expiration and reset the clock. Under federal law, a judgment lien lasts 20 years and can be renewed once for another 20 if the creditor files a renewal notice in time.1Office of the Law Revision Counsel. 28 U.S. Code 3201 – Judgment Liens
If you own real estate, filing often creates a lien automatically. In federal court, filing a certified copy of the judgment attaches a lien to all real property you own.2Office of the Law Revision Counsel. 28 USC 3201 – Judgment Liens Some states attach the lien automatically on filing; others require the creditor to record the judgment in each county where you own property. The lien doesn’t force a sale, but when you try to sell or refinance, title companies will flag it and the lien must be paid off before closing. Your home equity effectively becomes collateral for a debt that may have had nothing to do with the house.
The Balance Keeps Growing
Interest starts accruing the day the judgment is entered. In federal court, the rate is tied to the weekly average one-year Treasury yield from the week before entry, and it compounds annually.3United States Courts. 28 USC 1961 – Post Judgment Interest Rates State courts set their own rates, and fixed rates of 8 to 12 percent are common. Post-judgment interest usually applies to collection costs as well, not just the original amount. Waiting it out is rarely a strategy; the debt grows quietly the whole time.
What the Creditor Can Do Now
Each collection tool requires a separate court order on top of the judgment, but courts grant them as a matter of routine.
Wage Garnishment
A garnishment order directs your employer to withhold part of each paycheck and send it to the creditor.4Consumer Financial Protection Bureau. Can a Debt Collector Take or Garnish My Wages or Benefits Federal law caps the amount at the lesser of 25 percent of your disposable earnings for the week, or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage, currently $217.50 per week.5Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment Some states cap garnishment lower.
Bank Account Levies
A bank levy freezes the funds sitting in your account on the day it’s served so they can be turned over to the creditor. Unlike garnishment, which pulls from ongoing income, a levy sweeps a balance. Your bank must automatically protect two months’ worth of directly deposited federal benefits before freezing anything else.6NCUA. Garnishment of Accounts Containing Federal Benefit Payments Beyond that, the rest is reachable.
Property Seizure
For larger judgments, a creditor can ask the court to seize and sell personal property such as vehicles or equipment. It happens less often than garnishment or levies because it costs more and most states exempt basic property, including a vehicle up to a certain value, household goods, and tools of your trade. For debtors with significant non-wage assets, it’s still a real risk.
Income and Property That’s Off Limits
Several categories of federal income are shielded from garnishment and levy: Social Security, Supplemental Security Income, veterans’ benefits, federal railroad retirement benefits, and federal employee retirement benefits.6NCUA. Garnishment of Accounts Containing Federal Benefit Payments When these are direct-deposited, the bank must protect two months’ worth automatically.7Consumer Financial Protection Bureau. Your Benefits Are Protected From Garnishment
States add their own exemptions: homestead protection for equity in a primary residence, a dollar-amount exemption for a personal vehicle, and shields for retirement accounts. The specifics vary widely. Courts do not apply exemptions for you. If a creditor goes after protected income or property, you have to raise the exemption with the court, and you usually have a short window to do it.
Challenging the Judgment
A filed judgment isn’t always permanent. Federal Rule of Civil Procedure 60(b) and its state equivalents allow a court to set aside a judgment in several circumstances:
- Mistake or excusable neglect — a legitimate reason you didn’t respond, like serious illness.
- Newly discovered evidence that couldn’t have been found earlier with reasonable effort.
- Fraud or misrepresentation by the other side in obtaining the judgment.
- A void judgment, usually because the court lacked jurisdiction over you — often from improper service.
- A judgment that has already been satisfied, discharged, or that rested on an earlier judgment since reversed.8Legal Information Institute. Federal Rules of Civil Procedure Rule 60 – Relief From a Judgment or Order
To undo a default judgment, courts generally want to see two things: a reasonable excuse for not responding and a legitimate defense to the underlying claim. The strongest ground is improper service. If the summons was never properly delivered, that’s a lack of personal jurisdiction, and many courts impose no time limit on raising it. Improper service happens more than people expect: papers left with the wrong person, sent to an old address, or served without the steps state law requires. If you only found out about a judgment after the fact, that’s worth investigating right away.
Bankruptcy as a Stop
Filing bankruptcy triggers an automatic stay that immediately halts most collection, including enforcement of existing judgments — garnishment, levies, seizures, and the creation or enforcement of judgment liens.9Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay The stay takes effect the moment the case is filed.
Whether the debt is wiped out depends on the chapter and the type of debt. Most credit card balances, medical bills, and personal loans can be discharged in Chapter 7. Debts from fraud, certain taxes, and domestic support obligations generally survive. If the underlying debt is discharged, the judgment goes with it, though removing an attached lien from property records may take an additional step. Bankruptcy carries serious long-term credit consequences, but for someone facing aggressive collection with no path to pay, it’s a legal way to stop the enforcement.
Paying, Settling, and Closing It Out
Paying the judgment in full, with accrued interest and costs, is the cleanest resolution. Many creditors will also take a lump-sum settlement for less than the full amount, especially when the alternative is years of chasing payments. Get any settlement in writing before you send money, and make the agreement say explicitly that the creditor will file a satisfaction of judgment once payment clears. Some courts will approve an installment payment plan on motion, which can pause active collection while you’re paying.
Whatever path you take, the final step is making sure a satisfaction of judgment is filed with the court.1Office of the Law Revision Counsel. 28 U.S. Code 3201 – Judgment Liens That filing releases any liens on your property and clears the public record. Without it, the judgment continues to cloud your title and show up in background searches even after you’ve paid in full. Most states require the creditor to file the satisfaction within a set period after payment and penalize them for not doing so, and if they stall, you can file a motion asking the court to compel them. Follow up until the paperwork is on record. The debt isn’t truly gone until that document is filed.