In my job, I talk with many judgment enforcers. Recently some told me about an article they saw, about vacating judgments as a recovery strategy; and wanted my feedback. That article promoted a flawed concept of offering to help vacate a judgment, to get it paid quickly.
This article explains why vacating a judgment to get it paid, is not a good idea. My articles are my opinions, and not legal advice. I am a Judgment Broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
What does it mean to vacate a judgment? Vacating a judgment is when a court voids, or sets aside their previous decision to issue it. The court makes a "Nunc Pro Tunc" (now for then) decision to make the previous judgment disappear. If it is vacated, that means it is like it never existed.
In theory, a creditor could bring a motion to vacate a judgment. However, it is almost always the debtor that files motions to vacate. The laws and rules covering vacating them vary by state and court. There are time limits, and courts require a logical reason to vacate a judgment. The most common valid reasons judgments get vacated are:
1) Defective service. This only works with default judgments, when the debtor claims they were not served properly, notice of the lawsuit.
2) Mistake. When a person understands the facts to be other than they are. This is not easy to prove, because ignorance of the law or negligence in researching the law, is not an excusable mistake.
3) Surprise. When a party is placed in an injurious legal situation, through no fault or negligence of their own. This is very rare.
4) Inadvertence or excusable neglect. Examples would be illness, relying on a flaky attorney, or when a court officer makes a serious mistake.
5) Void judgments. These are very rare, these are based on a lack of jurisdiction, fraud on the court, mistakes of the court, etc.
Judgments are not vacated for trivial reasons, including the convenience or wishes of the parties, or merely to settle them.
The silly strategy promoted on a few judgment-related blogs is basically, that vacating a judgment is a motivation for a debtor to pay you. "You suggest to the debtor if they pay you, a motion to vacate it can be filed with the court."
The incentive for the debtor for this flawed strategy, is that debtors want to get judgments off their credit reports. "No judgment on a credit report is better than a satisfied judgment on their credit report. Judgment owners and enforcers can make a deal to cooperate in vacating it, in exchange for getting paid."
There are four reasons why cooperating to vacate a judgment as an incentive for a debtor to pay it, is a bad idea for an enforcer especially, and also for original judgment owners:
1) Enforcers are the assignees of record, and have no standing or relation to the circumstances that caused the judgment.
2) Vacating a judgment requires a proof of service to be filed and a court hearing. Judgment satisfaction requires neither of those. The court will not appreciate any frivolous reasons to vacate it, and may wonder why the parties are wasting the court's time, when satisfying it is the correct way to settle and close the court case file. Imagine if a judge hears the debtor paid the enforcer and they conspired to vacate it instead of satisfying the judgment.
3) There are strict time limits and requirements on the causes of action to vacate judgments. This means there is a slim chance of this strategy even being possible.
4) Assignees of record, recommending and cooperating to vacate judgments might be bad policy, that could cause negative attention from government regulators, judges, etc.
The reasons and opportunity to vacate judgments is limited, and vacating them is a serious matter; and should not be used a bargaining tool.
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