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Sunday, 02 June 2013 17:00

Judgments and Credit Bureaus

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We often get the following questions from associations, board members and community managers:  If we obtain a judgment against an owner, will it negatively impact their credit score?  Can we report the judgment to one of the credit bureaus?  Will the credit bureaus find out about the judgment?

In short, a judgment will more likely than not get reported.  However, unless the association has reporting capabilities to Experian, TransUnion or Equifax, the association will not be the entity reporting the judgment.

The credit bureaus are not generally equipped to take data regarding judgments one by one.  Experian, for example, hires vendors to monitor court dockets.  The vendor will send information found on a daily basis.

With that said, the vendors are limited to reporting judgments actually posted to a particular court docket and it can take a few weeks to see a judgment post to the court’s system.  Other challenges involve the credit bureaus verifying a judgment relates to a specific consumer.  Dates of birth and social security numbers are the most typical identifying data the credit bureaus use for reporting.  Statutes in most states do not permit the publishing of social security numbers on judgments.

So while a judgment more likely than not will be reported to the credit bureaus, there is no guarantee the judgment will impact that debtor’s credit score.  As such, associations should not rely on the possible negative impact to a debtor’s credit score as a way to recover monies owed.

More effective methods to recover on judgments include, but are not limited to, ensuring judgments are recorded in the county where the debtor resides/resided, bank and/or wage garnishments, when banking or employment information is known.  And, per a past Tip, sometimes waiting to collect on a judgment is the most effective tool of all.

           

Additional Info

  • Author: Lynn Krupnik
Read 5000 times Last modified on Thursday, 05 June 2014 18:48
Lynn Krupnik

Ms. Krupnik graduated first in her class from Arizona State University College of Law in 1996, where she was named the ASU Alumni Association Outstanding Graduate. Ms. Krupnik also received the Inernational Academy of Trial Lawyers Award (for exceptional trial advocacy skills in Law School Clinic), John J. Ross Award (for outstanding performance in Business Association courses), CALI Excellence for the Future Award (for excellent achievement in Law School Clinic), and Order of the Coif. While at ASU, Mr. Krupnik served as a managing editor for the Arizona State Law Journal, and as a writing instructor for first year law students. After graduation, Ms. krupnik accepted a judicial clerkship with Vice Chief Justice James Moeller of the Arizona Supreme Court. Ms. Krupnik served on the Board of Directors for the Central Arizona Chapter of the Community Associations Institute for six years, and is a member of the College of Community Association Lawyers. She frequently writes and lectures on association issues. Ms. Krupnik has been an attorney with Ekmark & Ekmark since 1997, where she heads up the general counsel department and has assisted hundreds of associations in successfully addressing the variety of issues faced by associations on a daily basis.

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