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It can be frightening being faced with a legal suit from collections agency. It is important that you do not allow a default judgment to be entered against you. Your best option is to go to court and dispute the judgment, or to settle out of court to avoid the record of the law suit on your credit report.

There is a lengthy statute of limitations with any judgment filed against you. Normally the statute of limitations on judgments ranges from twelve to twenty years. It is becoming more common for collection agencies to initiate lawsuits in collection cases because the judgments are renewable. After the collections agency initiates a judgment, that judgment may be renewed prior to the expiration of the original judgment. This can be bad news for the debtor, as theoretically a judgment could remain against the debtor indefinitely.

Another fact to be aware of is that when you pay off a collections judgment that has been initiated against you, your credit record will show a “satisfied judgment” mark for seven years from the date that you paid the judgment. Anyone checking your credit will know that you have suffered a judgment against you. For this reason it is important that you avoid any legal collection suits whenever possible.

Should you already have a judgment showing on your credit report, there are actually strategies that you can use to have them removed from your record. Consumers are actually protected by many state and federal laws regarding their credit. You do have the right to dispute your credit reporting’s with the credit reporting bureaus. You may also negotiate with your creditor and request that they note your account as “pay for delete” rather than “satisfied judgment”. This is a much better option than having your credit report state that there was a judgment against you. When negotiating with your creditor should you decide to use this technique, be certain that you have a written agreement stating that the creditor agrees to this, as otherwise your creditor may choose not to follow through with your agreement.