Legal Question in Credit and Debt Law in Pennsylvania

Why would you agree to pay her $5000 for a car that was in the girlfriend's name? The lack of a notary and/or witness means nothing other than its her word against yours. You could deny that you signed anything and she really is not going to pay for a handwriting expert and neither are you. The judge in magistrate's court will therefore decide who is telling the truth and if you admit the agreement to pay then you are going to be stuck paying.

What I don't get is the whole larger picture. Why did she take the car back? It will be treated as a voluntary repossession so that was stupid of her. But why were you to pay the $5000 in the first place? Was this for you?

How much of the funds can you come up with now? Offer her $2000 - $2500 just to settle and be done and get her to dismiss the suit if you pay. If you don't have the cash, don't make any agreements. Go to the hearing - you will have to let her tell her side of the story to the judge and then you tell yours. Whoever loses can appeal, but I don't know how viable that is going to be. If you really have some arguable defenses (which are not apparent from your post) then you might want to talk to a consumer lawyer in PA about this prior to the hearing.

If a judgment is entered against you, it will be reported on your credit. Depending on what you own, your girlfriend may or may not be able to collect. There is no wage garnishment in PA. Keep less than $300 in the bank at all times and she will not be able to levy on your bank account. After several years, she might be more willing to accept a settlement so start saving up now if this is a route you want to go.

Judgments can be enforced in PA against land for 5 years but they can be renewed for additional 5 year periods. Judgments can be enforced against personal property (cars, bank accounts) for 20 years. So you will want to resolve this at some point if you ever hope to be able to live normally and not have to worry about this. Judgments can stay on your credit report for 7 years from the date of entry. While they are supposed to drop off after this, as I said, they can remain in effect for a longer period. They never go away; they get bigger and earn interest at a rate of 6% which accrues on a daily basis.