07 Apr The Consequences of Ignoring a Debt Judgment

Judgments can dramatically change your life’s trajectory. It’s a mark on your name that’s truly tricky to get rid of. They can stay on your credit record for five years or until it’s rescinded. Ignoring it can result in legal action.

The consequences of ignoring a debt judgment include your wages being garnished, your bank account being levied, a liens being placed on your property, you accruing more interest, your credit score dropping further, forced asset seizure, or being held in contempt of court.

In this post, we explore what could happen if you ignore a debt judgment and how you can remove judgments.

What Happens When You Ignore a Debt Judgment?

If you ignore a judgment, your wages could be garnished, your bank account might be levied, a liens may be placed on your property, you might accrue more interest, your credit score will drop further, you might face forced asset seizure, or you might be held in contempt of court.

Your Wages Could Be Garnished

If you ignore a judgment or refuse to pay it, your creditor may apply for an emoluments attachment order to be placed against you. These orders, typically referred to as “garnishee orders,” order your employer to garnish your wages – take money from your salary to pay your creditors – before it reaches your bank account.

Your Bank Account Might Be Levied

Your bank account might be frozen, and funds could be withdrawn to cover the debt, leaving you without access to your money. This can cause your card to be declined, drawing money impossible, and making EFTs inaccessible.

A Liens Might Be Place Against Your Property

A liens is a judgment or order that appears on its records. While this won’t seize your property, it’ll make reselling your property difficult. When conveyancers check the deeds office and the property’s official records, they’ll look for liens against it.

More Interest and Fees

Often, judgments accrue interest – the longer you don’t pay, the more interest you’ll accrue. You may also be liable for debt collection fees and your creditor(s) legal fees.

Your Credit Score Will Drop

Once you have a derogatory mark on your credit report, your score will drop dramatically. This is because your credit score is calculated by taking your credit history – the good, the bad, and the defaults – into consideration. Negative marks demonstrate that you’re financially irresponsible. A lower score will discourage creditors from lending you money, ensuring you don’t default.

Your Assets Might Be Forecfully Seized

If you refuse to pay or can’t, you could be involuntarily sequestrated (declared bankrupt). Your creditors will file a motion with the court, and your assets will be seized and auctioned, so long as they cover at least 20% of what you owe. In other words, for every R1 you owe, your assets must cover 20% of it.

Contempt of Court or Legal Action

If you ignore court orders, circumvent them, or disobey them, you may be held in contempt of court. Contempt of court could result in quite hefty fines, adding to your overall debt. In extreme cases, you may also face jail time.

Need a Judgment Removed?

Cape Town Legal Consultants are experts in removing judgments. For years, we’ve assisted South Africans of all circumstances and financial backgrounds with overcoming poor credit records and getting a fresh start. Let us assist you – contact us today.