What Is a Judgment? Understanding Its Impact on Your Finances and How to Avoid It

What is a judgement?

A judgment is a formal decision made by a court, which is recorded publicly. In financial terms, it often refers to a court ruling that occurs when a creditor takes legal action against you for unpaid debt. If you’ve fallen behind on payments and haven't made arrangements to settle your outstanding amounts, you might be at risk of having a judgment issued against you.

When Is a Judgment Issued?

A judgment typically occurs when a creditor successfully claims that you owe a debt, and you fail to respond to legal notifications or appear in court. Here's how the process works:

1. Initial Payment Missed: If you miss a payment, your creditor will usually try to reach out and offer solutions, such as a new payment arrangement.
2. Letter of Demand: If you continue to miss payments, the creditor will send a Section 129 Notice, which is a formal demand for payment. This serves as the last attempt to get you to settle the debt before they take further legal action.
3. Court Summons: If you don't respond to the demand or arrange payment, the creditor can take you to court by issuing a summons.
4. Failure to Defend: If you don't show up to court or fail to provide a valid defense within 10 days, the court may issue a default judgment in favor of the creditor.
5. Judgment Granted: Once the judgment is granted, it becomes a permanent record on your credit report and confirms your liability for the debt. However, the judgment doesn’t cancel the debt. You are still required to pay it, and the creditor may use several methods to collect the money.

What Happens After a Judgment Is Granted?

If a judgment is made against you, the creditor can take several actions to recover the owed amount. Some of the methods they may use include:

• Warrant of Execution: If the debt remains unpaid, a creditor can apply for the repossession of property (for example, your home or vehicle).
• Garnishee Order: A creditor can apply for a garnishee order to deduct money directly from your salary or wages until the debt is settled.

Can a Judgment Be Removed?

It is possible to have a judgment removed from your credit report under certain conditions:

1. Lack of Knowledge: If you were unaware of the legal action and have a valid defense that was not previously raised, you can apply to have the judgment rescinded.
2. Debt Settled: If you’ve paid off the debt in full, the creditor may agree to have the judgment removed.
3. Creditor Agreement: If the creditor agrees, they may request the court to rescind the judgment against you.

Once the judgment is rescinded by the court, you must contact the credit bureaus to update your credit report and ensure the judgment is removed.

How Can Meerkat Help You Avoid or Deal with a Judgment?

If you’re concerned about the possibility of a judgment being issued against you due to unpaid debt, Meerkat is here to help. As a registered financial services provider specialising in debt counselling, we assist South Africans who are struggling with debt through legal and regulated processes. Our debt review services, governed by the National Credit Act (NCA), provide a structured solution to help you manage your debt and avoid legal action, including judgments.

At Meerkat, we’ve successfully helped thousands of South Africans reduce their financial stress by negotiating with creditors, securing manageable payment plans, and helping you stay out of court. Our team of experts can help you understand your options and guide you through the process of managing your debt before it leads to a judgment.

Get Debt Help Now

Don’t wait until a judgment negatively impacts your credit and financial future. If you’re struggling with debt or are worried about the possibility of legal action, Meerkat can provide you with expert advice and assistance. Contact us today for a free consultation, and let us help you regain control over your finances and avoid the serious consequences of a court judgment.