If you have a court judgment against you, you generally have four ways to resolve it: pay the full amount in one lump sum, negotiate a reduced settlement, arrange installment payments, or discharge the debt through bankruptcy. Interest accrues every day the judgment sits unpaid, so how to pay a judgment against you is partly a question of which option you can afford and partly a question of how fast you can move. In federal courts, the post-judgment rate has run around 3.5% in early 2026; state rates are set by statute and are often higher.1Office of the Law Revision Counsel. 28 USC 1961 – Interest2Northern District of Texas | United States District Court. Post Judgment Interest Rates
Confirm What You Actually Owe
Before you write a check or make an offer, get a copy of the judgment order from the court clerk. The order lists the principal amount, the date judgment was entered, and the interest rate that applies going forward. Because interest runs from the date of entry, the payoff figure on any given day is always higher than the face amount. In federal court, the rate is tied to the weekly average one-year constant-maturity Treasury yield for the week before entry.1Office of the Law Revision Counsel. 28 USC 1961 – Interest Ask the creditor or their attorney for a written payoff quote good through a specific date so you know exactly what number to work with.
While you’re looking at the order, check whether the judgment itself is sound. If you were never properly served with the lawsuit, if the amount entered is wrong, or if the court had no jurisdiction over you, you may be able to file a motion to vacate. An appeal is a separate route. Both have tight deadlines that vary by jurisdiction, and neither pauses interest unless you get a specific court order to that effect.
Pay the Full Amount at Once
Paying in full is the fastest way to end the matter. It stops interest, removes the threat of garnishment or levy, and lets you get a satisfaction of judgment on file right away. If you have the cash, or can borrow it at a rate below the judgment rate, this is usually the cheapest option overall.
Pay by cashier’s check or certified check, not a personal check. If you mail the payment, use certified mail with return receipt so you can prove delivery. Keep copies of the check, the receipt, and every piece of correspondence. Before you send anything, get a written statement from the creditor confirming that the payment will fully satisfy the judgment and that they will file a satisfaction of judgment with the court.
Negotiate a Reduced Settlement
If you can put together some money but not the whole payoff amount, offer a lump-sum settlement for less than what you owe. Creditors often accept a discount because they get cash immediately and avoid months or years of collection work. Have the case number, judgment date, and current payoff in front of you when you call, and start lower than what you’re actually willing to pay.
Get the deal in writing before any money changes hands. The written agreement should state the total to be paid, the payment date, that the agreed amount is full and final resolution of the judgment, that the creditor waives any remaining balance, and that the creditor will file a satisfaction of judgment once payment clears. A vague handshake can fall apart later, with the creditor claiming the discount didn’t happen and coming back for the difference.
Set Up an Installment Plan
When a lump sum isn’t realistic, an installment plan spreads the judgment out over time. You can negotiate one directly with the creditor, and in some states you can ask the court to order installments even over the creditor’s objection, particularly if your income and expenses leave only a small amount available each month.
Whether the plan is negotiated or court-ordered, the written terms should spell out exact payment amounts, due dates, how interest is handled, and what happens if a payment is missed. Falling behind on an agreed plan can trigger the full range of enforcement tools with very little additional notice, so build the payment amount around what you can actually sustain, not what you hope you can.
Discharge the Debt Through Bankruptcy
Filing for bankruptcy triggers an automatic stay that immediately halts collection activity against you, including active wage garnishments, bank levies, and pending seizures. The stay takes effect the moment the petition is filed.
In a Chapter 7 case, many judgment debts can be discharged, meaning you’re no longer personally liable. Once the underlying debt is discharged, the creditor cannot garnish, levy, or otherwise collect. If the creditor already recorded a judgment lien against your real estate before you filed, that lien may survive the discharge, and you would need to file a separate motion in the bankruptcy court to avoid the lien by showing it impairs an exemption.
Not everything qualifies. Debts arising from fraud, intentional injury, certain taxes, and domestic support obligations like child support or alimony typically survive bankruptcy. A bankruptcy filing also stays on your credit report for seven to ten years. For someone with no realistic way to pay, though, it can be the right choice.
When You Genuinely Can’t Pay
If your only income comes from exempt sources like Social Security or disability benefits, and you have no non-exempt assets, you may be what lawyers call judgment proof. The judgment still exists and interest still accrues, but the creditor has no practical way to collect. Social Security benefits are generally exempt from garnishment and levy for private debts under federal law, with narrow exceptions for federal tax debts and child support or alimony.3Social Security Administration. SSR 79-4 – Sections 207, 452(b), 459 and 462(f) Levy and Garnishment of Benefits
Being judgment proof isn’t a permanent fix. Creditors can wait years and try again if your finances improve, and in most states they can renew the judgment to keep it alive. What it buys you is time to consider a deeply discounted settlement or bankruptcy from a position where the creditor has little leverage.
What Happens If You Don’t Pay
A judgment creditor doesn’t need your cooperation. If you ignore the order or default on a payment plan, the creditor can ask the court for orders that take money directly from your paycheck, your bank account, or your property. Fees and costs typically get added to the balance once enforcement starts.
Wage Garnishment
A garnishment order directs your employer to withhold part of your pay each period and send it to the creditor. For ordinary consumer debts, federal law caps the withholding at the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage.4U.S. Department of Labor. Fact Sheet #30: Wage Garnishment Protections of the Consumer Credit Protection Act (CCPA) With the federal minimum wage at $7.25 per hour, that threshold is $217.50 per week. Below $217.50, nothing can be garnished. Between $217.50 and $290, only the amount over $217.50. At $290 or more, the 25% cap applies. Many states protect more of your paycheck than the federal floor does. Federal law also bars your employer from firing you because of a single garnishment.5U.S. Department of Labor. Garnishment
Bank Levies
A bank levy freezes and seizes funds in your account. The creditor obtains a writ of execution and serves it on your bank, which freezes enough to cover the judgment. You usually find out after the freeze is already in place. If your account has received direct deposits of federal benefits like Social Security, veterans’, or federal retirement payments within the previous two months, the bank must automatically calculate a protected amount equal to those deposits and keep it accessible to you without your having to file anything.6eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments If non-exempt funds are frozen, you can challenge the levy by motion, but the deadlines are short.
Asset Seizure and Property Liens
A writ of execution can also authorize a sheriff or marshal to seize non-exempt personal property, such as vehicles, jewelry, or investment accounts, and sell it at public auction. Each state has its own list of exempt property covering necessities like basic household goods, clothing, and work tools; the specifics vary widely, so check your state’s exemption statutes early.
Judgments also create liens on real estate. In many states this happens automatically in the county where the judgment is recorded; in others the creditor must file an abstract of judgment with the county recorder. Once a lien is on the title, you generally cannot sell or refinance without paying it off at closing. A homestead exemption can protect some or all of your home equity, and the amount varies widely by state, from unlimited to modest caps.
File a Satisfaction of Judgment
Paying the judgment isn’t quite the last step. A satisfaction of judgment, signed by the creditor and filed with the court, is the document that officially closes the case. In most states the creditor is legally required to file it after receiving full payment, but don’t assume it will happen on its own.
After you pay, send the creditor a written request to file the satisfaction. If nothing happens within a reasonable time, most states let you file it yourself with proof of payment (a copy of the cashier’s check and delivery receipt) and a sworn statement that you paid in full and the creditor failed to file. Filing fees are usually modest, generally $0 to $50. If the judgment was recorded as a lien in one or more counties, file the satisfaction with each county recorder’s office where the lien sits. An unresolved lien can block a future sale or refinance even after you’ve fully paid the debt. Keep a copy of the filed satisfaction with your permanent records.