![]() You will want the interest rate to be zero percent (0%). If the creditor insists make sure that you address the issue of interest. If you are negotiating your own settlement and the creditor is asking for a stipulated judgment it never hurts to ask that the settlement be put in place without one. If you are facing a large judgment or if you have multiple creditors that you cannot pay bankruptcy may be a good option to deal with your debt problem once and for all. ![]() This is an option particularly in cases where the amount in dispute is relatively low (under $10,000) and you are offering either a large lump sum or are able to pay the settlement off within a year or less.Īnother option is bankruptcy. ![]() If you don’t have strong defenses or if you don’t feel comfortable taking your case to trial you can still attempt to negotiate a settlement without a stipulated judgment. If you believe you have strong defenses you can elect to take the case to trial. ![]() Alternatives to Signing a Stipulated Judgment You are also waiving your right to a trial. The downside to a stipulated judgment is that if for whatever reason you can’t make the payments as agreed in the settlement you will end up with a judgment against you. A big plus of the stipulated judgment is that you retain some power over the situation whereas in a trial setting the final decision is going to be left to a judge. It allows you to enter into a settlement with the creditor and negotiate the terms by which you will repay whatever amount is agreed to. Stipulated judgments make sense for consumers when the debt is legitimately owed to the creditor and there are no defenses or disputes that the creditor needs to raise at trial. A stipulated judgment takes a lot of the risk out of the collections process for the creditor. Why Would a Creditor Want You to Sign a Stipulated Judgment?Ĭreditors like stipulated judgments because they get what they want (money) and they are protected from you defaulting on your settlement agreement through the stipulated judgment – if you don’t make the payments they get a judgment for the full amount. The creditor is protected because if you default on your monthly payments then they have a judgment for the full amount without having to go through the hassle of a trial. So you incentive to make good on the payments is that you will be paying less than what the creditor would get if they went to trial and won. However, the stipulated judgment is usually for the full amount. ![]() Usually the amount you are agreeing to pay is less than what the creditor is seeking in the lawsuit. The typical agreement that accompanies a stipulated judgment usually states that you will agree to pay a monthly payment or a lump sum and so long as you keep up your end of the deal the debt buyer / creditor agrees not to file or execute on the stipulated judgment. By agreeing to a judgment you will forgo your right to a trial and agree to be bound by the terms of the stipulated judgment. What is a Stipulated Judgment?Ī stipulated judgment is a judgment where the both parties (you and the debt buyer) have agreed to the terms of the judgment and both signed it. In this article I will explain what a stipulated judgment is, why a creditor would want you to sign one, and discuss the pros and cons of entering into a stipulated judgment. And while creditors will usually agree to settle a debt, if a court case has already been filed they will often ask for you to sign a “stipulated judgment” as part of the settlement. When a debt is legitimately owed I have found that most people simply want to negotiate a settlement with the creditor and get it behind them. ![]()
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