Judgments allow creditors to collect the money you owe. With a judgment a creditor can garnish your wages, tax returns and bank accounts. All 50 states have a statute of limitations that limit the time a judgment can be used to collect money owed.
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When you obtain credit, you are obligated to repay the debt. If you fail to repay the debt, the creditor can pursue legal action to recover the money you owe. The creditor must have court approval to obtain a judgment. The creditor must file a petition and serve you notice. This notice allows you to go to court and defend your position. If the creditor can show the court you do, in fact, owe the money and have failed to repay the debt, a judgment can be granted. The judgment can then be used to garnish a certain amount of your paycheck, garnish your tax returns or withdraw money from your bank accounts.
