Can a Legal Judgement Impact a Business Deal?Posted on: December 12, 2018 by Gavin Muirhead
The first thing to understand when you’re planning to move forward with any big venture, regardless of type, is make sure that you understand the legality of what you–or the person you’re working with–are about to do. The legal world can be confusing, with difficult language and high barriers to entry. The key is to do your research accurately, or find the services of a lawyer. This will prevent any unforeseen repercussions that you might not have thought of, or that you were not prepared for.
What is a Legal Judgement?
A “legal judgement” is a decision, as made by a court of law, generally against the loser of a particular case. For example, if a creditor or collector had taken you to court over an unpaid sum of money, and you lost the case, the court/judge will make a judgement against you, in favor of the creditor or collector, and that will be filed and a part of the public record.
Since it’s a part of the public record, anyone can–and does–have access to the information. Depending on the circumstances, this can become quite negative for you or any of your future ventures.
How Long Does a Judgement Last?
Obviously, if there is a judgement not in your favor that’s a part of the public record, anyone can have access to that document. In most cases, you would rather that that information was not public, as someone could find the information and use it in ways unfavorable to you.
For example, if someone was doing a background check on you prior to hiring you, or your company, and find out–via the public judgement against you–that you were in debt or something similar, they may be less likely to want you for that position. Credit reporting agencies will often track the judgements leaving a courthouse and attach them to your credit record as well, which could affect your credit score and/or ability to apply for loans or things of that nature.
Thankfully, a judgement can only remain on your credit report for 7 years. While it’s possible to have it removed, it can also be resolved after the money has been paid, as well.
Can I Remove a Judgement from my Record?
After the judgement has been filed, the money–the amount that you were taken to court for–will begin to accrue interest. You can either pay that interest (and the debt) or let it accrue. It’s likely that the creditor will attempt to collect it from you forcefully if you don’t pay. Regardless, once the debt has been paid, either you or the creditor can file a “satisfaction” essentially stating that both parties have done their part and the debt is taken care of. This is one way to remove a judgement.
A vacated judgement is one that no longer exists; essentially, it’s like the judgement never even happened. Credit reporting agencies are not supposed to keep track of vacated judgements, and you can take it up with (or sue) the credit reporting agencies if they keep it on your record. Having a report “vacated” is the only way to have it removed from your credit report before the seven year time stamp has finished.
Just because it’s supposed to only last seven year does not mean that that’s always the case; depending on the state, the judge can have the file “revived” before it’s due to expire, meaning that it will continue on your credit report for another seven years.
How Will it Impact a Business Deal?
Having a judgement on your credit report will have different levels of severity when closing on a business deal, depending on the details of the deal. Depending on with whom the deal is with, the severity, length of time, and chance of satisfaction–as well as which party has the judgement–can make a difference. It will be turned up during a background check, and will likely be a topic of conversation. It can definitely influence creditors willing to loan money (including mortgages, loans, etc.) which can create a barrier.
Thankfully, Affordable Background Checks is here to make this complex area just a little bit easier; they will skillfully, quickly, and accurately provide you with the background check that you need to ascertain that the person/people you are creating a deal with have a clean background in all aspects, including credit and legal judgements.