What is satisfaction of judgment?

When one individual or company, or creditor, sues for payment of a debt and the court rules in their favor, it issues a judgment. The judgment requires the debtor to pay the amount determined by the court. One method is to pay the court directly. Another option is to pay the creditor or to make arrangements with the creditor for an installment plan if it is not possible to pay the amount due all at once.

Once the judgment has been paid, the debtor is entitled to ask the creditor or the person who filed suit to file a satisfaction of judgment. This form indicates that the judgment has been paid and must be witnessed by a notary public before being filed with a clerk of the court. The debtor can check to confirm that the document was filed and that the judgment has been recorded as satisfied in the court records.

Documenting Satisfaction of Judgment

As with many financial situations, it is important that after paying a judgment, the debtor keeps good records and tracks the court process. Any documentation of payment should be kept. For example, if a check is written, the purpose of the check should be clearly written in the memo section and a copy should be made. This information can be used if a creditor attempts to claim that the judgment was not satisfied. It is also advisable to keep a copy of the judgment in order to confirm that the amount of the payment corresponds with the amount ordered by the court.

Some creditors will file a satisfaction of judgment automatically when the debtor has paid. In most states, the law makes it the creditor’s responsibility to file a satisfaction of judgment. The creditor has to send a confirmed copy of the form, indicating whether the satisfaction was full or partial, to the court and the debtor. If a creditor refuses to file, the debtor can consult a lawyer for assistance with getting the creditor to file the document.

The Judgment Process, Records and Your Credit Report

In addition to tracking the judgment process, record keeping is important once the judgment has been satisfied. A person who has paid a judgment should have documentation that a satisfaction of judgment has been filed and recorded. An outstanding judgment can show up on credit reports and can interfere with one’s ability to obtain credit. It can also complicate background checks. The court should be able to provide information about how long it takes to process the satisfaction of judgment and update their records.

Case Studies: Understanding Satisfaction of Judgment

Case Study 1: Tim vs. Alpha Collections Agency

After a lengthy legal battle, the court ruled in favor of Alpha Collections Agency, granting them a judgment against Tim for an outstanding debt. Determined to resolve the matter, Tim promptly paid the full judgment amount to Alpha Collections Agency. Recognizing Tim’s payment, Alpha Collections Agency responsibly filed a satisfaction of judgment with the court, officially closing the case and confirming Tim’s debt had been satisfied.

Case Study 2: Sarah vs. Beta Bank

Facing financial difficulties, Sarah was unable to pay the entire judgment amount owed to Beta Bank in a single payment. She approached Beta Bank and proposed an installment plan to settle the debt gradually. Beta Bank agreed to the arrangement but seemed hesitant to file the satisfaction of judgment after receiving the initial partial payment from Sarah.

Frustrated with the delay, Sarah sought legal counsel to enforce Beta Bank’s obligation to file the necessary documentation.

Case Study 3: John vs. Credit Recovery Services

John successfully paid off the judgment against him, which was secured by Credit Recovery Services. However, he noticed that the satisfaction of judgment had not been promptly filed by the creditor. As a result, the judgment still appeared on John’s credit report, adversely affecting his creditworthiness and financial prospects.

Seeking resolution, John took action by contacting the court to expedite the process and update the records accordingly.​