Stipulated Judgment Definition

What is a stipulated judgment?

A stipulated judgment is a court order requiring one party to pay another party a specific amount of money, usually according to a payment plan. A stipulated judgment, also known as a consent judgment, is arranged in court by a debtor who has limited means to repay their debt, often established as a means for a debtor to prevent Payday entry.

Key points to remember

  • A stipulated judgment is a court order that requires one party to pay a specific amount of money to another party.
  • If the debtor is unable to meet the terms of the judgment, then they may have to forgo benefits, such as waiver of late fees, and not be offered the courtesy of a trial to explain their position.
  • The stipulated judgment provisions differ between states and jurisdictions.

Understanding the Stipulated Judgment

A stipulated judgment is an order made by a court to settle a debt, which requires that a debtor pay them creditor an amount determined according to an agreed timetable. In most cases, a stipulated judgment is sought by a debtor as a last-ditch attempt to settle a debt with a creditor who has sued for reimbursement of amounts owed, along with associated costs and interest.

If a creditor can obtain a civil judgment against a debtor, the court can order payment through various means, including voluntary payments and garnishment of the debtor’s paychecks. Debtors facing a court decision concerning offender debt may apply to court for a stipulated judgment to terminate garnishment and other collection proceedings.

Stipulated judgments vs bankruptcy

Although the laws vary from case to case and state to state, the judgments stipulated can sometimes be final in bankruptcy.

Many types of debt cannot be canceled in bankruptcy, including student loanstax debt, child support and alimony. Other types of debts may be canceled in bankruptcy at the discretion of the court. A debtor with a judgment stipulated against him should consult an attorney familiar with federal and state laws governing bankruptcy and discharge of debt.

Stipulated Judgment Requirements

A debtor who accepts a stipulated judgment establishes a legally binding agreement with his creditor to pay a specified sum of money within a specified time. In many cases, debtors find a stipulated judgment advantageous in agreeing to settle a debt, as creditors are sometimes willing to negotiate for a reduced amount. They can also forgive late feeinterest charges and even a portion of the principal balance to settle the debt.

Delinquent debtors who accept the stipulated judgments must then meet all repayment obligations within the timeframe agreed with the debtor or risk losing all benefits, including fee reductions and the threat of wage garnishment.

At the time a stipulated judgment is rendered, it will deal with the terms and conditions in the event that either party fails to abide by their agreement. In most cases, where a debtor fails to meet the payment plan agreed to in a judgment stipulated, then the debtor will be liable for the entire original debt, including interest and fees, less any sums already repaid. .

A stipulated judgment is a court decision. By signing the stipulated judgment, a debtor is held liable for payments and cannot be offered the courtesy of a trial, if he is in default. If the debtor is not interested in entering a stipulated judgment, then they can agree to a consent order – a voluntary order drawn up between two parties interested in reaching an agreement regarding the payment of the debt. Consent orders vary by state and jurisdiction.

Sample Stipulated Judgment

John has accumulated $6,000 in credit card debt and cannot pay it off immediately. The credit card company turned the case over to a collection agency, which harasses John with calls and letters threatening wage garnishment.

John tried to negotiate with the credit card company, but neither party could agree to the terms and amount of the refund. The credit card company wanted a higher monthly repayment amount — $500, which John couldn’t afford with a low-paying job.

Eventually, John spoke to a lawyer who told him to enter into a stipulated agreement with the company. Under the terms of the judgment, John now pays a monthly amount of $100 and is required to repay the entire debt within 60 months.

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