What Is A Stipulated Judgment, And Will It Work In Your Case?

When you legitimately owe a debt, you may simply want to agree to a settlement with the credit buyer and get done with it. Creditors usually agree to negotiate a settlement as well. However, if the plaintiff has already filed a lawsuit, they will often want you to sign a ‘stipulated judgment’ as an accessory to the settlement. In this blog, we aim to provide all the necessary information regarding stipulated judgment, and pros and cons of entering it.


What does a Stipulated Judgment Mean?

A stipulated judgment is signed when both – the plaintiff and the defendant – agree on the terms of judgment. As a defendant, agreeing to a stipulated judgment would mean that you are forgoing your right to a trial. You will also be bound to the terms negotiated in the judgment.

The standard agreement usually states that the defendant is agreeing to pay a fixed monthly amount or a lump sum, which should ideally be less than the actual debt. The plaintiff agrees not to deviate from the stipulated judgment as long as the defendant keeps up their end. It must also be noted that the creditor is protected in stipulated judgment. This is because if you default on payments, they have rights to a full payment without having to go through a trail.


Why Creditors Want You to Sign a Stipulated Judgment?

A creditor would want you to sign a stipulated judgment because its terms and conditions go in his/her favor. By the virtue of a stipulated judgment, they get the money, and they are protected if you default on your payments. A stipulated judgment eliminates the risk factor out of the equation for a creditor.


Pros of Agreeing to a Stipulated Judgment

Signing a stipulated judgment works for the defendants who legitimately owe debt to the creditors. It allows you to enter an agreement where you have the flexibility over mode and methods of payment of whatever amount is agreed. Opposed to a trial, a stipulated judgment allows you a level of control over your situation.


Cons of Agreeing to a Stipulated Judgment

The biggest downside to signing a stipulated judgment is that you are waiving your right to a trial. If you fail to pay the agreed amount for whatever reasons, the creditor gets the judgment in their favor without the hassle of going through a trial.

In short, a stipulated judgment is your creditor’s insurance policy will only be cashed if you default. Learn about more legal issues and credit card debt situations in our best-selling eBooks, the Defendant’s Package and the Discovery Package.