What is a judgment? | Consumer Financial Protection Bureau (2024)

FAQs

What is a judgment? | Consumer Financial Protection Bureau? ›

In a debt collection lawsuit, a judgment is a court order that allows the debt collector to use stronger tools, like garnishment, to collect the debt. A judgment is an official result of a lawsuit in court.

It supervises banks, lenders, and large non-bank entities, such as credit reporting agencies and debt collection companies. The Bureau also works to make credit card, mortgage, and other loan disclosures clearer, so consumers can understand their rights and responsibilities.

A judgment is a court order stating that you owe the debt collector money because of a lawsuit. You may have received a judgment because the court decided in favor of the debt collector in a trial, or because you did not respond to a lawsuit that was filed against you.

Sometimes the CFPB will send a warning letter to advise recipients that certain actions may violate federal consumer financial law. These are not accusations of wrongdoing.

The judgment becomes a matter of public record, and is indexed with the clerk of the court. It shows up on your credit report as well as on any background checks. The judgment is considered a lien against your property, including any real estate that you have, in the state in which the judgment is filed.

Consistent with applicable law, we securely share complaints with other state and federal agencies to, among other things, facilitate: supervision activities, enforcement activities, and. monitor the market for consumer financial products and services.

The person or company that violated the law pays the CFPB, and then we send the money to harmed consumers, sometimes through a payments administrator. These payments are also known as Bureau-Administered Redress.

Since judgments no longer appear on your credit report, they do notdirectly impact your credit score. However, financial choices and behaviors that lead to having a judgment on your report may indirectly affect your score. You may have outstanding balances, debts, collections and more.

There are only three ways in which a judgment can be made to go away: paying the debt, vacating the judgment or discharging the debt through bankruptcy.

You paid the debt: Credit agencies will remove the judgment from your credit report if you can show that you did pay your debt on time. If you paid your debt after the judgment was established on your credit report, the agency won't remove the judgment. But it will mark your debt as paid, which is helpful.

What powers does the CFPB have? ›

With this authority, the Consumer Financial Protection Bureau has the ability to examine for and monitor compliance with federal consumer financial laws and regulations at both large banks and nonbank financial services companies.

The CFPB investigates potential violations of federal consumer financial laws by entities or individuals within its authority and initiates public enforcement actions when appropriate. Timely actions, according to the agency, help better protect consumers.

If you have a judgment against you, creditors can legally pursue collection methods such as garnishing your wages, placing a lien on your property, or levying your bank accounts to recover the owed amount.

If you don't pay, what you owe can increase

As long as the money is unpaid, it gathers interest at 5% or 10% per year (for example, if 10% interest, $1,000 owed becomes $1,100 after a year, $2,000 at 10 years). The sooner it is paid, the less interest you will have to pay.

Judgment, however, is not necessarily something to worry about. There are positive, neutral and negative forms of it. Whether it's therapy or an actual courtroom, the key is understanding which one you are dealing with and learning how to respond.

The Financial Protector protects you against the financial risk of being unable to pay your premiums. The Financial Protector is automatically accessed to pay the premiums due on your Lifestyle Protector policy through Financial Protector's benefit investment account, as long as this amount is positive.

We have supervisory authority over banks, thrifts, and credit unions with assets over $10 billion, as well as their affiliates. The depository institutions and affiliates included in the list below are currently under CFPB's jurisdiction and subject to CFPB supervision and examination.

The CFPB implements and enforces federal consumer financial laws to ensure that all consumers have access to markets for consumer financial products and services that are fair, transparent, and competitive.