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If you have a debt which is subsequently sent to collections, you will drastically damage your credit score. Your credit score will be damaged even more significantly if your creditor decides to seek a judgment.

If you are served with a Notice to Appear in court with regard to an unpaid debt, your creditor is through trying to work with you to collect the debt. After receipt of the Notice, you will have 30 days to object to the filing. If you can prove that the debt is invalid, you can have the case dismissed.

A creditor may or may not be serious if it threatens to file a law suit. However, going to court should be a very, very last resort in your mind.

A credit report which lists an “unpaid” judgment will continue to show that unpaid judgment for 10-12 years. A renewal of this listing may occur if, at the end of this period, the judgment remains unpaid. Your credit report will list a paid judgment for up to 7 years from the date paid.

It is wise to contact your creditor to arrange a lump sum payment or a payment plan. However, do this only after checking your state’s statute of limitations laws to determine if your debt falls within or outside of the laws. If your debt falls within the statute of limitations, you are still obligated to pay the debt and you should try to negotiate payment. Adversely, if your debt falls outside of the statute of limitations laws, you no longer owe the debt though, if you offer to make payment, you will start the clock running all over again.

If the court issues an official court order for payment of the debt, your credit score will suffer drastically. This negative mark will not show up on your credit report if you contact your creditor and negotiate a settlement prior to the entry of judgment.

Offering to negotiate a settlement is the best solution for all parties. Typically, creditors do not want to go to court and will accept a portion of the amount owed just to bring the matter to a close. If you do not have a lump sum to offer as payment, you can always attempt to negotiate a payment plan. If your creditor is not “in the mood” to consider any offers, you might think about calling the lawyer handling the case for your creditor.

If a judgment is dismissed, it will be reported on your credit report as “legally void.” This is considerably less harmful than a “paid” judgment. Paid judgments remain for seven years on your credit report from the time paid.

The best outcome would be to negotiate a full deletion of all negative information. If you are successful in negotiating this, make sure you get the agreement in writing and that you obtain the signatures of both parties. Keep in mind that once the court becomes involved, your chances of negotiating a settlement are next to none.

An experienced credit attorney might be a good idea. You may, in the long run, save some money and lessen the damage to your credit score by employing a seasoned consumer credit attorney.

How to Stop Midland Credit Management Collection Agency and Fix Bad Credit in 24 Hours. www.MidlandCreditDebt.com