It's usually a good thing, if you decide to settle a large judgment for somewhat less than the total amount due.
Most settlements make the judgments go away, but it doesn't need to happen. I'm a Judgment referral expert, not an attorney. This article is only my opinion, please hire an attorney if you require legal advice.
The drawback when using "settlement agreement" in your document is these agreements can easily be breached, and one more battle in a court may be needed to move one more case to judgment. Instead of that, why not title this kind of compromising document as a "memorandum of understanding", that gets the same results, without a possibility to have to litigate a breached agreement to settle.
What should you do if your debtor's lawyer insists that you sign a settlement document, should you roll over and sign the agreement or stand your ground? Before you agree to sign such a settlement document, think about the odds of your judgment debtor not repaying you as agreed.
What happens if you sign one of those kinds of settlement agreements which you should not ever put your signature on, an agreement which contains the phrase "release of all claims"? Then you'll have a possible big novation problem.
A novation is a brand new obligation which takes the place of the previous one when sign the paperwork. You should avoid this as when you put your signature on this kind of agreement; it may be considered to be novation, and your judgment vanishes as per the law, when you sign such an agreement.
Instead of novation, use an accord and satisfaction, where you accept something less than the full amount owed to satisfy the obligation, but the previous obligation remains standing if the agreement is breached. That's a big improvement.
If you've got wording within your agreement which says the agreement doesn't replace the previous judgment obligation, the judgment remains active however it is temporarily stayed; you'll bypass novation and the judgment will remain.
It's a smart idea to include a few sentences within your agreement which states your agreement is an accord and satisfaction, and isn't a novation. The common wording in the majority of pre-judgment settlement agreements can be a trap for the inexperienced in postjudgment situations.
When the debtor pays in full as per the agreement, the judgment debt is extinguished; however without complete performance by the judgment debtor, the judgment is due again in full.
If your judgment debtor repays what is owed as per your compromise memorandum of understanding, then you should satisfy the judgment. When you satisfy the judgment, make sure to do these 7 steps if applicable:
1) A satisfaction of judgment should always be filed at the court.
2) Record your judgment satisfaction in all counties where an abstract of judgment was recorded.
3) Release all Uniform Commercial Code liens liens with your Secretary of State.
4) Release any upcoming levies.
5) Release any other liens you have.
6) Dismiss any fraudulent conveyance lawsuits related to the judgment.
7) Agree to sign all other document(s) reasonably requested by the debtor to confirm that their judgment was completely satisfied and all liens were released.
Certain judgment recovery specialists won't sign any settlement documents. They say something like: "When you give me your check, I'll give you a judgment satisfaction". A judgment is a public record and they will not sign a settlement agreement.
Certain lawyers have requested that judgment recovery specialists to arrange to get the judgment vacated when paid. Certain debtors don't want the record of a judgment and to that, many recovery specialists might say something similar to: "You should've taken care of this a long before now if you didn't want a judgment on the public record".
Mark Shapiro - Judgment Broker - http://www.JudgmentReferral.com - where Judgments go and are quickly Collected!