If you have a debt which is subsequently sent to collections, you will drastically damage your credit score. Your credit score will be damaged even more significantly if your creditor decides to seek a judgment.

Your creditor is sending a clear signal that it is through playing games if you are served with a Notice to Appear in court for a judgment proceeding. You will have 30 days from being served to object to the filing. You can have the case dismissed if you can prove that the debt is invalid.

If a creditor merely threatens to go to court, it may or may not be serious. In any event, you should view going to court as an absolute last resort.

A credit report which lists an “unpaid” judgment will continue to show that unpaid judgment for 10-12 years. A renewal of this listing may occur if, at the end of this period, the judgment remains unpaid. Your credit report will list a paid judgment for up to 7 years from the date paid.

It is wise to contact your creditor to arrange a lump sum payment or a payment plan. However, do this only after checking your state’s statute of limitations laws to determine if your debt falls within or outside of the laws. If your debt falls within the statute of limitations, you are still obligated to pay the debt and you should try to negotiate payment. Adversely, if your debt falls outside of the statute of limitations laws, you no longer owe the debt though, if you offer to make payment, you will start the clock running all over again.

If the court issues an official court order for payment of the debt, your credit score will suffer drastically. This negative mark will not show up on your credit report if you contact your creditor and negotiate a settlement prior to the entry of judgment.

It is best to try to negotiate a settlement with your creditor. It is often the case that a creditor will accept a portion of the amount owed in exchange for the time and expense of going to court. Alternately, you could offer a payment plan. If your creditor will not accept any offers, you should consider talking to the lawyer handling the matter for your creditor.

Your credit report will show the debt as “legally void” if the judgment is dismissed. This is much less damaging than a “paid judgment,” which can be shown on your credit report for seven years from the date paid.

In addition to a settlement, you should attempt to negotiate a deletion of the negative information in its entirety from your credit report. If you are able to accomplish this, it is imperative that you obtain the agreement in writing and obtain both parties’ signatures. It is good to remember that negotiating opportunites all but vanish once the court becomes involved.

You might consider hiring a good consumer credit attorney. It may cost you a little bit, however, you may find that, by having an attorney handle the negotiations, you may save money as well as minimize the damage done to your credit score.

How I Stopped Midland Credit. I Erased a $14,072 Midland Credit Debt and Fixed my Bad Credit. www.MidlandCreditDebt.com