Advice if Creditor is Increasing balance After Judgment

23 Oct

I had my wages garnished on account of a default, and made all the payments. Now a creditor is claiming more…Help!

I had a collection account with a major creditor; after many calls and correspondence from to arrive at a payment plan I could afford, I never received a response until I was service with a Civil Lawsuit and my wages were garnished from 9/2007 until 7/2008 for payment of this debt. I never disputed the amount owed, unfortunately, no one would work with me. I was contacted by phone in October, 2008 (4 months later) by the law firm representing the creditor. They have indicated that I still owe “interest” on this matter and filing fees. I received another call 11/13/08. Also, thru the regular mail, I received an unrecorded copy of a judgement indicating the interest due and fees. The law firm rep. will not provide me with any statement of what this “interest” amount is calculated on or even a rate. Just short of hiring an attorney myself (which I should have done years ago), how do I proceed? It’s been a financial nightmare that I could not avoid due to disability and huge medical bills. Thank you for any insight you can provide.


Most states do allow creditors to add interest, collection costs, and attorney’s fees to the balance of a judgment after the judgment is entered by the court, but the amount the creditor can add and how it must go about this process will largely depend on your state of residence. For example, in California, a judgment creditor must file with the court a document called a “Memorandum of Costs after Judgment, Acknowledgement of Credit, and Declaration of Accrued Interest,” in which it outlines the costs it has incurred in its efforts to enforce the judgment, the interest accrued, and the amount it has received in payments to reduce the judgment balance. Once the creditor files this statement with the court, the court will review the claimed costs and interest, and unless you object to the claim, will likely add the request amount to the judgment balance. The creditor is required to mail you a copy of this document before it is considered by the court, giving you an opportunity to file an objection; if you do file an objection, the court will likely set the matter for a hearing, allowing you and the creditor to argue your cases to the judge.

While the process is similar in many other states, please remember that the procedure outlined above is specific to California, and is only provided as an example of the fact that judgment balances can have interest and fees added. Regardless your state of residence, a judgment creditor usually cannot increase the balance owed on a debt arbitrarily without court approval. Even though you are receiving collection calls claiming you owe additional money on this debt, if you have not received a statement from the creditor outlining what charges it claims you now owe, you should be cautious about making any additional payment. I encourage you to consult with an attorney in your state of residence to discuss the situation you are facing and to determine what steps you can take to protect yourself from arbitrary claims by this judgment creditor. You may also wish to contact the court which entered the judgment against you to inquire about any request for increase in the judgment balance the creditor may have filed without notifying you.

You should remember that in many states, the amount of interest that can be charged on judgments is limited by law; for example, California law limits judgment interest to 10% per annum. If you suspect that the creditor is claiming interest at a rate higher than that allowed by your state law, or requesting fees which are unreasonable, you may wish to consult with an attorney to determine what recourse is available to you.

If the creditor follows the correct procedure to have its costs and legal interest added to the judgment balance, you may have no choice but to pay the amount claimed. However, I would be wary about a call from a creditor demanding payment for costs and interest for which it refuses to provide an itemized statement. As I said, many states (if not most) require judgment a creditor to file a request with the court which issued the judgment to request an increase in its fees; if the creditor has not taken that step in your case, you may simply be dealing with a rouge collector who is trying to squeeze money out of you which is not rightfully owed. I again recommend that you consult with an attorney in your state to determine what actions the creditor can take in this situation and what steps you can take to protect yourself.

I wish you the best of luck in resolving your dispute with this creditor, and hope

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