Legal Question in Credit and Debt Law in North Carolina

Payment of a debt does not take it off your credit report. It only comes off after the required period of time.

I agree with Mr. Love. However, once you pay the Judgment it should show as a "paid civil judgment", and the tradeline for the debt should show a 0 balance as a paid collection account. If the credit report is not updated, you need to get a copy of the Complaint and the satisfaction of Judgment from the Clerk and send it to the credit bureaus with your dispute. When you pay off the Judgment (assuming you pay the creditor and not the Clerk directly), make sure to send a written request to the creditor to notify the Clerk of Court that the judgment has been fully satisfied. Send this certified mail, return receipt requested and save the receipt, in order to preserve your rights.

I agree with my colleagues. The debt will be reported twice - once as a judgment and once as a bad debt (it should have a zero balance). One the judgment is satisfied it will be marked as paid; the collection should be noted as paid too.

However, these don't come off. Judgments last forever but they are enforceable for 10 years and can be renewed for another 10. They can stay on your credit report 7 years from the date of entry. Bad debts can stay on the report for about 7 1/2 years from the time of your last payment.

The limit for small claims was $5000 but the legislature raised this to $10,000. If you were sued before the limits took effect then it would be $5000. Some creditors don't find it cost effective to get a lawyer and go to regular to court to sue for the whole amount so they will eat the amount owed that is over the limit.

However, even the $5000 may be reduced further - it depends on the lender and how long its been and how much you can pay in a lump sum.

Paid judgments or paid collections should not hurt you. Most mortgage lenders like a few months to pass after you satisfied the judgment before you apply for a loan, but other than that, you should not be further dinged by the existence of these debts. Your score should actually improve over time. And there are things you can do to boost your credit (keeping your debt/credit ratio low, having a mixture of installment and revolving credit (like a mortgage or car loan (installment) and one or two credit cards (revolving) (but not store cards).

If you need help resolving the judgment or fixing your credit both Attorney Love or Attorney Coleman are in your area. I am also available. Please contact me at [email protected] if interested.