What Happens If You Ignore a Court Judgment for Debt?

If you've been sued for unpaid debt and lost the case—or simply didn’t show up—you may be facing a court judgment. Many people feel overwhelmed and unsure of what to do next. But here’s the truth: ignoring a court judgment can make your financial situation worse, and fast. In this article, we’ll break down exactly what happens if you ignore a court judgment for debt, the potential consequences, and what steps you can take to protect yourself.

What Is a Court Judgment for Debt?

A court judgment is a legally binding decision issued by a judge in favor of the creditor (the person or company you owe money to). This judgment confirms that you owe the debt and allows the creditor to pursue specific legal actions to collect the money, such as wage garnishment, bank levies, or property liens.

You may receive a judgment after:

• Missing a court date (default judgment)
• Losing a lawsuit filed by a creditor
• Failing to respond to a debt collection lawsuit

Why Ignoring a Judgment Is a Costly Mistake

Ignoring a court judgment won’t make it go away. In fact, the longer you wait, the worse the situation becomes. Here’s what can happen:

1. Wage Garnishment

The creditor can ask the court for a wage garnishment order, which means a portion of your paycheck will be withheld and sent directly to them. This can continue until the debt is fully paid.

• Federal law allows up to 25% of your disposable income to be garnished.
• Some states have stricter limits—or may not allow wage garnishment for certain debts.

2. Bank Account Levies

Creditors can freeze and take funds directly from your bank account once they have a judgment. You may not receive advance notice, and this can disrupt your ability to pay rent, bills, or buy food.

3. Property Liens

If you own property, a creditor can place a lien on it. This means you can’t sell or refinance the property until the debt is paid—and the creditor may be able to force a sale in some situations.

4. Additional Interest and Legal Fees

Judgments typically accrue interest over time, meaning your debt grows the longer it remains unpaid. Creditors can also tack on legal and collection costs.

5. Credit Score Damage

A judgment may appear on your credit report and damage your score, making it harder to get approved for loans, apartments, or even jobs.

What Happens If You Ignore Wage Garnishment or Bank Levies?

Trying to outmaneuver the system can backfire:

• Switching jobs won’t help unless you resolve the judgment. The garnishment can be re-applied to your new employer.
• Opening a new bank account in your name may not protect your money if creditors discover it.
• Failure to respond to post-judgment discovery (like a financial questionnaire or deposition) can result in being held in contempt of court.

How Long Can a Judgment Last?

Judgments don’t expire quickly. In most states, they last 10 years and can be renewed. That means a creditor can pursue collections for decades—until the debt is satisfied or settled.

Can You Be Arrested?

Not directly for debt. But if you ignore a court order—such as failing to attend a judgment debtor exam or refusing to comply with a subpoena—you could be held in contempt of court. That may result in fines or jail time.

Your Options After Receiving a Judgment

If you’ve already received a court judgment, here are your best moves:

✅ 1. Negotiate a Settlement

Creditors may accept a lump-sum or reduced payment to resolve the debt. Get everything in writing before you pay.

✅ 2. Set Up a Payment Plan

If you can’t pay in full, contact the creditor or their attorney and request a reasonable monthly installment plan.

✅ 3. File a Motion to Vacate the Judgment

If you never received notice of the lawsuit or had a valid defense, you may be able to ask the court to reopen the case.

✅ 4. Claim Exemptions

Some assets and income (like Social Security or disability benefits) are protected. You may need to file paperwork to assert these exemptions.

✅ 5. Consider Bankruptcy

If you’re buried in multiple judgments or debts, bankruptcy may offer a clean slate and stop collections—including garnishments and levies.

How to Protect Your Rights

• Open your mail: Never ignore court documents or legal notices.
• Know your state laws: Each state has its own limits on garnishment and property exemptions.
• Act quickly: Time is critical. The sooner you respond, the more options you have.
• Document everything: Keep copies of all paperwork, emails, and payment records.
• Get legal advice: Consider consulting a legal aid service or attorney, especially if your income is low.

Resources for Help

• Consumer Financial Protection Bureau (CFPB)
• Legal Services Corporation (for free legal aid)
• National Foundation for Credit Counseling (NFCC)

Final Thoughts

A court judgment is not the end of the road—but ignoring it will almost always make things worse. Take control by understanding your rights, exploring your options, and making a plan to move forward. Whether it’s negotiating a settlement, asserting exemptions, or exploring bankruptcy, you still have choices—and the sooner you act, the better.

Debt doesn’t define your future. But action does.