You usually can't escape a credit card judgment by moving, though doing so can mean more work for your creditor to collect the amount owed. Moving may require your creditor to file another lawsuit in the new state, and will change your creditor’s options by either expanding or limiting its collection methods based on relevant state laws. However, there’s no getting away from that blot on your credit report.
The Seven-Year Glitch
If a credit card company wins a judgment against you, it goes on your credit report for potential lenders and employers to see. A judgment relating to a credit card account remains on your credit report for seven years before falling off, so it’ll have an impact on your life for years after it was granted initially, regardless of the state in which you live.
Judgments That Transfer
Most states have adopted the Uniform Enforcement of Foreign Judgments Act. In this case, “foreign” doesn’t refer to debts from overseas, but debts from any other state or federal court. At the time of publication, 47 states, the District of Columbia, the Northern Mariana Islands and the U.S. Virgin Islands adhered to that document, which normally means judgments from one state are enforced in another without the need for separate legal action. If you move from one of those states to another, your creditor usually doesn't have to do much to get it recorded in your new home as well. That’s not always the case, however. New York and Connecticut, for example, do not register default judgments from other states. The creditor would need to go back to court to secure enforcement in these states.
Creditors have a specific length of time to collect on a judgment, which differs from state to state. In general, judgments remain collectible for 10 years, though some states offer a longer initial collection period. Moving from a state where judgments are on the record longer to one with a shorter time period would seem to reduce the creditor's ability to collect. However, judgments can be renewed prior to their expiration, so you could theoretically be on the hook for decades if you don’t settle the obligation, and the creditor remains determined to collect despite your moves.
When a credit card company wins a judgment, it has several methods it can use to collect. It can garnish your wages, take the money from your bank account or file a lien against your home, for example. All of these options, however, must be undertaken in accordance with state laws, so a move across state lines can affect collections. Some states offer a greater level of protection for specific assets than others.
- Digital Vision./Photodisc/Getty Images