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A stipulated judgment, also known as a consent judgment, is an agreement between two parties that settles a court case. In the context of consumer law, a stipulated judgment is a court order requiring one party to pay the other a specific amount of money, usually on a payment plan. A stipulated judgment is arranged by a debtor who has limited means of repaying debt, typically as a way to prevent wage garnishment.
A stipulated judgment is a type of court order that can be issued to settle a debt, which requires that a debtor pay their creditor a specified amount according to an agreed schedule. In most cases, a stipulated judgment is sought by a debtor as a last-ditch attempt to settle a debt with a creditor that has sued for repayment of monies owed, in addition to any associated fees and interest.
If a creditor can secure a civil judgment against a debtor, the court can order payment through a variety of means, including voluntary payments and garnishment of the debtor's paychecks. Debtors who face a court judgment regarding delinquent debt may petition the court for a stipulated judgment in order to halt garnishment and other collection proceedings.
While a stipulated judgment will most likely be a more favorable option than a civil judgment, you'd be better off making sure your debt never becomes delinquent in the first place. If you're struggling to keep up with your loan payments, one of the best debt relief companies or credit counseling agencies may be able to help you get back on track.
While laws vary from case to case and state to state, stipulated judgments may sometimes be dischargeable in bankruptcy.
Several types of debt cannot be forgiven in bankruptcy, including student loans, tax debt, child support, and alimony. Other types of debt may be forgiven in bankruptcy at the discretion of the court. A debtor with a stipulated judgment against them will need to consult an attorney familiar with the federal and state laws governing bankruptcy and the discharge of debt.
A debtor who agrees to a stipulated judgment establishes a legally binding agreement with their creditor to pay a specified amount of money on a specified timeline. In many cases, debtors find a stipulated judgment advantageous in agreeing to settle a debt, as creditors are sometimes willing to negotiate for a reduced amount. They may also forgive late fees, interest charges, and even part of the principal balance in order to settle the debt.
Delinquent debtors who agree to stipulated judgments must then meet all repayment obligations on the agreed-upon timeline with the debtor or run the risk of forfeiting all benefits, including fee reductions.
At the time a stipulated judgment is issued, it will address the terms and conditions in case either party does not uphold their agreement. In most cases, when a debtor fails to adhere to the payment plan agreed upon in a stipulated judgment, the debtor will then be liable for the entirety of the original debt including interest and fees, minus monies already paid back.
A stipulated judgment is a court decision. By signing the stipulated judgment, a debtor is held liable for payments and may not be offered the courtesy of a trial if they default on their payments. If the debtor is not interested in entering a stipulated judgment, then they can agree to a consent order—a voluntary order worked out between two parties interested in reaching an agreement regarding payment of debt. Consent orders vary by state and jurisdiction.
Casey has run up a debt of $6,000 on a credit card and cannot immediately repay it. The credit card company has turned the case over to a collection agency, which harasses Casey with calls and letters threatening wage garnishment.
Casey tried negotiating with the credit card company, but neither party could agree to the terms and repayment amount. The credit card company wanted a higher monthly repayment amount—$500, which Casey could not afford with a low-paying job.
Eventually, Casey talked to an attorney who told them to work out a stipulated agreement with the company. Under the terms of the judgment, Casey now pays a monthly amount of $100 and is required to pay off the entire debt within 60 months.
A stipulated judgment is voluntary and agreed upon between two parties, often as an attempt to avoid garnishment. Once a stipulated judgment is signed, it is legally binding.
A stipulated judgment is an opportunity to negotiate with your creditor to establish more reasonable terms, especially if your financial situation has changed. With different repayment terms, you may be able to avoid garnishment or bankruptcy.
If both parties have agreed to the terms of separation, a stipulated judgment may be decreed to dissolve the union. This means that the terms of the divorce were agreed upon outside of a courtroom, but they are made legally binding by the stipulated judgment.
A stipulated judgment can apply to many different legal situations, but they are often used to create a payment plan for debts. If you agree to a stipulated judgment, you must abide by the conditions, as it is legally binding. Read the terms carefully and ensure they are reasonable to your situation before signing any agreements.