If a court has entered a judgment against you, you still have options: you can ask the court to set the judgment aside, appeal it, negotiate a settlement for less than the full amount, use federal and state exemptions to protect income and property from collection, or, in serious cases, file bankruptcy. Which route makes sense depends on how the judgment was entered, whether the court and creditor followed the rules, and how much time has passed. Learning how to fight a judgment against you starts with the paperwork in the case file, not with the collection notice in your mailbox.
Read the Case File Before You Do Anything Else
Pull the complaint, the summons, any proof-of-service filing, and the judgment itself. Those documents tell you what the creditor claimed, which court decided the case, and whether you were properly notified.
Look for defects. The dollar amount may be wrong. Your name or the party being sued may be wrong. The court may have had no authority over you because you don’t live or do business in that jurisdiction. Any of these can be grounds to challenge the ruling.
Service is the single most important thing to check. Under the Federal Rules of Civil Procedure, a summons and complaint must be delivered to you personally, left at your home with someone of suitable age who lives there, or delivered to an authorized agent.1Cornell Law School. Federal Rules of Civil Procedure Rule 4 – Summons State courts follow similar requirements. If you never received the papers and only learned about the case after judgment was entered, that failure of service is one of the strongest arguments for wiping the judgment out.
Ask the Court to Set the Judgment Aside
If the judgment was entered without your participation — usually a default because you never answered the lawsuit — you can file a motion asking the court to set it aside. Courts grant these motions more often than people expect when a real procedural problem exists.
In federal court, Rule 60(b) allows relief from a judgment for mistake or excusable neglect, newly discovered evidence, fraud by the opposing party, or a judgment that is void (for example, because the court lacked jurisdiction). For the most common grounds you have to file within one year of the judgment, and every motion under the rule must be filed within a “reasonable time,” which the court evaluates on the facts.2Legal Information Institute. Federal Rules of Civil Procedure Rule 60 State courts have their own versions of this rule, often with similar deadlines.
Most courts also require you to show a meritorious defense — a real argument against the creditor’s claim that you would have raised had you appeared. Saying “I didn’t know about the case” usually isn’t enough by itself. Pair it with a factual explanation of why you don’t owe the money, or why you owe less than what the creditor claimed. This is where many motions fail: people focus on the procedural problem and forget to address the underlying debt.
Appeal If the Trial Court Got the Law Wrong
An appeal is not the same as a motion to set aside. Setting aside attacks the process. An appeal attacks the legal reasoning: you argue that the trial court misapplied the law. Appellate courts don’t hear new testimony or new evidence. They review the trial record.
The deadline is strict. In federal court, you must file a notice of appeal within 30 days after the judgment is entered.3Cornell Law School. Federal Rules of Appellate Procedure Rule 4 – Appeal as of Right – When Taken Most state courts have similar windows. Miss the deadline and you lose the right to appeal, with very narrow exceptions.
One trap catches people: filing an appeal does not automatically stop the creditor from collecting. To pause enforcement while the appeal is pending, you typically need to post a supersedeas bond, which is a guarantee (often from a surety company) that the judgment amount will be paid if you lose. The bond usually equals the full judgment plus estimated interest and costs. Some courts have discretion to reduce or waive it in hardship situations.
What Creditors Cannot Take, Even With a Valid Judgment
Even a fully valid judgment doesn’t give a creditor unlimited reach. Federal and state exemptions shield certain income and property so you can still cover basic needs.
Wage Garnishment Caps
For ordinary consumer debts, federal law limits garnishment to the lesser of 25% of your disposable earnings or the amount by which your weekly earnings exceed 30 times the federal minimum wage.4eCFR. Part 870 Restriction on Garnishment With the federal minimum wage at $7.25 per hour, if you earn $217.50 or less per week in disposable income, your wages cannot be garnished at all. For biweekly pay, the protected floor is $435; for monthly pay, it’s $942.50.5U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act
Support obligations are different. Creditors enforcing a child support or alimony order can garnish up to 50% of disposable earnings if you’re supporting another spouse or child, or up to 60% if you’re not. Those percentages climb an additional 5% if the support debt is more than 12 weeks overdue.4eCFR. Part 870 Restriction on Garnishment Many states are more protective than the federal floor, so check your state’s rules too.
Federal Benefits in Your Bank Account
If you receive Social Security, veterans’ benefits, or other federal payments by direct deposit, federal regulation requires your bank to automatically protect those funds when a garnishment order arrives. The bank calculates federal benefit deposits during the prior two months and keeps that amount fully accessible to you. You don’t have to file anything to claim the protection. The protected amount is the lesser of total federal benefit deposits during that two-month lookback or your current account balance.6eCFR. Part 212 Garnishment of Accounts Containing Federal Benefit Payments
Home Equity, Retirement, and Other State Protections
Beyond wages and federal benefits, most states protect some equity in your home (the homestead exemption), retirement accounts like 401(k)s and IRAs, basic household goods, and unemployment benefits. The generosity of these exemptions varies dramatically by state. Some protect hundreds of thousands of dollars in home equity; others protect very little. A few states let you choose between state exemptions and a set of federal bankruptcy exemptions, which can matter strategically. Know which of your assets are shielded in your state before you respond to any collection action.
Show Up for a Debtor’s Examination
After winning, a creditor can ask the court to order you to appear and answer questions under oath about your income, bank accounts, property, and employment. The proceeding goes by different names — debtor’s examination, judgment debtor exam, supplementary proceedings — but the purpose is the same: giving the creditor a map to your assets.
Do not ignore the order. This is a court order, and failing to appear can result in a contempt finding, with possible fines or jail time. You are not being jailed for the debt; you are being sanctioned for defying the court. Show up, answer honestly, and remember that exemption protections still apply to what you disclose. A creditor learning about a bank account doesn’t mean they can drain it if the funds are protected.
Settle for Less Than the Full Amount
Creditors frequently accept less than the full judgment, especially when the alternative is expensive enforcement against someone with limited assets. Settling for 40 to 60 cents on the dollar can look better to a creditor than chasing garnishments for years.
Bring a clear picture of what you can realistically pay, either as a lump sum or on a schedule. Documentation of income, expenses, and other debts makes your offer more credible. A creditor who can see the numbers is likelier to agree than one who suspects you’re hiding money.
Get everything in writing. A verbal settlement is practically worthless. Your written agreement should include the exact amount you’ll pay, the payment schedule, a statement that the creditor considers the judgment satisfied on completion, a commitment from the creditor to file a satisfaction of judgment with the court, and a release from any further claims related to the same debt. Without release language, nothing stops a creditor from later arguing the settlement only covered part of what you owed.
The Tax Bill That Can Follow a Settlement
If a creditor forgives part of your debt, the IRS generally treats the forgiven amount as taxable income. Settle a $30,000 judgment for $18,000, and the $12,000 difference may need to be reported as ordinary income. The creditor will typically send you a Form 1099-C reporting the canceled amount, and you’re responsible for reporting the correct figure even if the 1099-C is inaccurate.7Internal Revenue Service. Topic No. 431, Canceled Debt – Is It Taxable or Not?
The main escape hatch is the insolvency exclusion. If your total liabilities exceeded the fair market value of all your assets immediately before the cancellation, you were insolvent, and you can exclude canceled debt from income up to the amount of that insolvency. You claim this by filing Form 982 with your return. The calculation includes everything you own, and retirement accounts and otherwise exempt assets count toward your asset total for this purpose.8Internal Revenue Service. Publication 4681 (2025), Canceled Debts, Foreclosures, Repossessions, and Abandonments Debt canceled in a Title 11 bankruptcy case is also excluded from income.7Internal Revenue Service. Topic No. 431, Canceled Debt – Is It Taxable or Not? Using either exclusion generally requires reducing certain tax attributes, like net operating losses or credit carryovers, by the excluded amount.
Bankruptcy When the Judgment Threatens Your Survival
Bankruptcy is the most powerful option and also the most consequential. Filing a petition triggers an automatic stay that immediately halts virtually all collection activity, including wage garnishments, bank levies, and enforcement lawsuits. The stay continues until the case is closed, dismissed, or a discharge is granted.9Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
In Chapter 7, many types of judgment debt can be wiped out through a discharge. In Chapter 13, you repay a portion of your debts over three to five years based on what you can afford, and remaining balances on dischargeable debts are eliminated at the end. Not every judgment qualifies. Judgments based on fraud, willful injury, certain tax debts, and domestic support obligations typically survive bankruptcy. The line between dischargeable and non-dischargeable debt is critical, so confirm with a bankruptcy attorney that the judgment you want to eliminate actually qualifies before filing.
The Clock, and Why Waiting Costs You
Judgments don’t last forever, but they last longer than most people assume. Depending on the state, a judgment is enforceable for anywhere from 5 to 20 years, with 10 years being common. Most states also allow creditors to renew judgments before they expire, potentially extending enforcement indefinitely if the creditor follows the renewal steps. A creditor who misses the renewal deadline may lose the ability to collect, so track those dates if you’re waiting a judgment out.
Meanwhile the balance grows. Post-judgment interest accrues from the date the judgment is entered, at rates that vary by jurisdiction. Some states set a fixed statutory rate; others tie it to a benchmark like the Treasury bill rate. Rates commonly fall between 5% and 12% per year, so a $20,000 judgment can grow substantially over a decade.
Be careful about making partial payments or signing a new payment agreement on an old judgment. In some states, either action can restart the enforcement clock and give the creditor a fresh window to collect. Before making any voluntary payment, find out whether doing so resets the timeline in your jurisdiction.
Get the Satisfaction of Judgment on File
Once you’ve paid a judgment in full or completed a settlement, the creditor is supposed to file a satisfaction of judgment with the court, which officially marks the debt as resolved. If the creditor placed a lien on your property, you’ll also need that lien released.
Creditors don’t always file promptly, and some don’t file at all unless pushed. If yours won’t record a satisfaction after you’ve paid, you may need to file a motion asking the court to enter it on your behalf. Keep records of every payment and hold onto the written settlement agreement. Proving you completed your obligations is straightforward when the terms are documented.