I have a Judgment Entered Against me. What do I do?
It is certainly not pleasant to have a lawsuit filed against you, which you have no defenses to, or you are served with a Summons and Complaint and you wait too long to file an Answer and you are in default*. In either case, a judgment might ultimately be entered against you.
The impact of a judgment will depend greatly on your financial situation, however it is possible to live with a judgment. In South Carolina, judgments are only good for 10 years, i.e., they expire and are no longer collectible after 10 years. If you have real estate, a judgment is an automatic lien against any real estate that you may own. There can be a lien on other assets, but you need to have some action taken by the judgment creditor to secure the lien on these assets such as a vehicle or a bank account.
How much equity there is in an asset, if any, will define the options of the judgment creditor. If your equity (the difference between the value of an asset and any lien against it like a mortgage or the amount owed from purchasing a vehicle) is within certain limits then the judgment would not be collectible.
In South Carolina, your main assets are generally going to be your home and your vehicle. An individual is entitled to protect $60,975.00 in a home and $6,100.00 in a vehicle. There are numerous other exemptions such as an IRA or retirement account 100% protected. Also, salaries are exempt in South Carolina from the claims of the judgment creditors. You should use your salary for living expenses and to build up your IRA.
If you do not have any assets or the equity in your assets are within exemption limits, then there is really no collection activity that a judgment creditor can take against you. We would ride out the judgment until it comes off the record, i.e. expires by its own terms in 10 years.
While that is not the best place you want to be and you should consult a bankruptcy attorney if you do have a judgment entered against you, living with a judgment is possible.
* Your have 30 days from when you are served with a Summons and Complaint in which to file an answer. It is possible to stop the judgment from being entered with a Bankruptcy if the timing is right. It is also possible to avoid the judgment in a Bankruptcy if it impairs your exemptions. You should consult a bankruptcy attorney as soon as you are served with a lawsuit/ Summons and Complaint to discuss.