Common Debtor Mistakes
Many judgment debtors unknowingly make their situation worse through avoidance, poor communication, or misunderstanding their rights. Learn the most common mistakes and how to avoid them to protect yourself and resolve your judgment effectively.
Get the First 72 Hours ChecklistEducation Only: This content is for educational purposes and does not constitute legal advice. Laws vary by state. Consult with a licensed attorney for guidance specific to your situation.
Avoidance Mistakes
The most damaging mistakes stem from avoiding the problem. Ignoring a judgment makes everything worse.
Ignoring the Judgment
The Mistake: Hoping the judgment will go away if you ignore it. Judgments don't expire for 5-20 years (depending on state) and can be renewed indefinitely.
Why It Happens: Overwhelm, shame, fear, or belief that you can't afford to pay anyway.
How to Avoid: Face the judgment immediately. Even if you can't pay now, communicate with creditor and explore options. Ignoring leads to garnishment, levy, and additional costs.
Not Responding to Court Notices
The Mistake: Ignoring garnishment notices, levy orders, or debtor examination summons. This forfeits your right to object or claim exemptions.
Why It Happens: Not understanding the importance of court documents, thinking it's "too late" to respond.
How to Avoid: Respond to EVERY court notice within deadline. Even if you don't have a lawyer, file a response. Silence = automatic loss.
Avoiding Communication with Creditor
The Mistake: Refusing to talk to creditor or return calls. This eliminates possibility of settlement or payment plan negotiation.
Why It Happens: Fear of saying the wrong thing, embarrassment, or belief that talking will make things worse.
How to Avoid: Communicate professionally. You don't have to agree to anything, but keeping lines open creates negotiation opportunities.
Rights and Protections Mistakes
Debtors have legal protections, but you must assert them. These mistakes forfeit rights you're entitled to.
Not Claiming Exemptions
The Mistake: Allowing garnishment or levy of exempt funds (Social Security, disability, child support, etc.) because you didn't file exemption claim.
Why It Happens: Not knowing exemptions exist, missing filing deadline, or thinking exemptions apply automatically.
How to Avoid: Learn federal and state exemptions. File exemption claim immediately when you receive garnishment/levy notice. Exemptions are NOT automatic.
Voluntarily Giving Up Exempt Property
The Mistake: Agreeing to let creditor take property that's legally exempt (household goods, tools of trade, certain vehicles) because you didn't know it was protected.
Why It Happens: Creditor pressure, not understanding exemption laws, wanting to "cooperate."
How to Avoid: Learn what property is exempt in your state. Never agree to surrender exempt property. Creditor can't legally take it.
Not Objecting to Incorrect Judgment Amount
The Mistake: Accepting inflated judgment amount that includes improper fees, incorrect interest calculations, or amounts already paid.
Why It Happens: Assuming judgment amount is final and can't be challenged, not reviewing calculation carefully.
How to Avoid: Review judgment amount line by line. If incorrect, file motion to correct judgment or object to garnishment amount. Bring proof of payments.
Financial Mistakes
Poor financial decisions can make your situation worse or prevent you from resolving the judgment.
Agreeing to Unaffordable Payment Plan
The Mistake: Committing to monthly payments you can't sustain. You default after 2-3 months, creditor pursues enforcement, and you're worse off than before.
Why It Happens: Pressure from creditor, optimism about future income, wanting to avoid garnishment.
How to Avoid: Only agree to payment plan you can realistically afford based on current income. Better to negotiate lower payment than default.
Draining Retirement Accounts to Pay Judgment
The Mistake: Withdrawing from 401(k) or IRA to pay judgment. Retirement accounts are usually exempt from collection AND early withdrawal triggers taxes and penalties.
Why It Happens: Panic, not knowing retirement accounts are protected, creditor pressure.
How to Avoid: Never touch retirement accounts to pay judgment. They're protected by law. Negotiate payment plan or settlement using other funds.
Taking High-Interest Loans to Pay Judgment
The Mistake: Using payday loans, title loans, or high-interest credit cards to pay judgment. You trade one debt for another with worse terms.
Why It Happens: Desperation to stop garnishment, not understanding long-term cost.
How to Avoid: Negotiate payment plan with creditor instead. Even garnishment is better than 400% APR payday loan.
Not Negotiating Settlement Discount
The Mistake: Paying full judgment amount when creditor would have accepted 50-70% settlement. You overpay by thousands.
Why It Happens: Not knowing settlement is possible, assuming full amount is required, fear of negotiating.
How to Avoid: Always attempt settlement negotiation if you have lump sum available. Most creditors prefer discounted lump sum over payment plan.
Documentation Mistakes
Poor record-keeping can cost you money and legal protections. Document everything.
Not Keeping Payment Receipts
The Mistake: Making payments without getting receipts. Creditor claims you paid less than you did, and you have no proof.
Why It Happens: Trusting creditor will track correctly, not thinking receipts matter.
How to Avoid: Demand written receipt for every payment. Keep copies of checks, money orders, and bank transfers. Never pay cash without receipt.
Accepting Verbal Settlement Agreements
The Mistake: Creditor verbally agrees to settlement, you pay, then creditor denies agreement and demands full amount.
Why It Happens: Eagerness to resolve quickly, trusting creditor's word.
How to Avoid: Get ALL settlement terms in writing before paying. Written agreement must specify amount, payment deadline, and satisfaction of judgment.
Not Documenting Creditor Violations
The Mistake: Creditor harasses you, calls at work after being told not to, or threatens illegal action—but you don't document it. Can't prove violations later.
Why It Happens: Not knowing violations are actionable, too stressed to document.
How to Avoid: Keep log of all creditor contact: date, time, what was said. Save voicemails and emails. Violations can result in damages and attorney fees.
Strategic Mistakes
These mistakes reflect poor strategy that makes resolution harder or more expensive.
Filing Bankruptcy Without Exploring Alternatives
The Mistake: Filing bankruptcy for single judgment when settlement or payment plan would have been cheaper and less damaging to credit.
Why It Happens: Panic, not understanding bankruptcy costs and consequences, aggressive bankruptcy attorney marketing.
How to Avoid: Explore settlement and payment plan options first. Bankruptcy should be last resort for overwhelming debt, not single judgment.
Hiding Assets Illegally
The Mistake: Transferring property to family members, hiding income, or lying in debtor examination. This is fraudulent transfer and can result in criminal charges.
Why It Happens: Desperation, bad advice from friends, thinking you won't get caught.
How to Avoid: Never commit fraud. Use legal exemptions to protect property. Fraudulent transfer can be reversed AND you face criminal liability.
Quitting Job to Avoid Garnishment
The Mistake: Quitting job to prevent wage garnishment. You lose income, creditor can still levy bank account, and you have no money to negotiate settlement.
Why It Happens: Panic about garnishment, not understanding garnishment limits (25% max).
How to Avoid: Keep your job. Garnishment is limited by law. You still keep 75% of wages. Use remaining income to negotiate better terms.
Mistake Prevention Checklist
When Facing a Judgment, Make Sure You:
Avoid These Mistakes From Day One
Get our First 72 Hours Checklist to respond correctly and protect your rights from the start.
Get the Free Checklist