A judgement debt is a type of debt that arises when a court enters a judgment against an individual or entity in favor of another. This means that the person or organization has been found to owe money to someone else, and as such, they are legally obligated to pay it back.
In many cases, judgement debts arise from unpaid bills or other financial obligations. For example, if a person fails to make payments on a loan, the lender may take them to court in an attempt to recover the money that they are owed. If the court rules in favor of the lender, then the borrower is responsible for repaying not only the original amount borrowed but also any interest and legal fees associated with the case.
Judgement debts can also arise from other types of lawsuits, such as those related to contract disputes or personal injury claims. In these cases, the court may order one party to pay money to another as a result of their actions.
Once a judgement has been entered against an individual or entity, it becomes a legal obligation that must be fulfilled. If the debtor fails to make payment, then the creditor may take additional steps to collect the money owed, such as garnishing wages or placing liens on property.
Overall, judgement debts are serious financial obligations that must be addressed in a timely manner to avoid further legal action and potential damage to one's credit score.