What is a Stipulated Judgment?

A stipulated judgment, also known as a consent judgment, refers to a court order to which the parties before the court have expressly agreed. As such, the stipulated judgment is the court's method of formalizing through judgment and agreement between the parties at trial.

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When is a Stipulated Judgment Used? 

A stipulated judgment, in general terms, is a court order that asks a debtor to pay the creditor a specific amount of money owed as per the given timeline. This is also referred to as a consent judgment. A debtor having restricted income or sources to repay loan usually uses a stipulation judgment. He or she usually does this to avoid wage garnishment. Generally, a debtor can take the help of a stipulated judgment as a last resort for settling the loan with a bank or a financial party that has sued them for the amount borrowed followed by interest and other charges. In case, a creditor manages to have a civil judgment against a borrower, the court can ask the latter to repay debt using many sources such as making payments on a voluntary basis, and garnishing the salaries or paycheck of borrower. In order to defend themselves from a civil judgment brought by creditors, debtors can go for a stipulated judgment. If a debtor complies with a stipulated judgment with a creditor and signs a legal contract with them, then the former is bound to make specific amounts of payment on a given time period. There are cases when a stipulated judgment works in favor of a debtor as sometimes creditors are ready to negotiate for a decreased price, or reduce or eliminate the principal amount, associated fees and charges. Delinquent borrowers, complying with stipulated judgments, should ensure to match all repayment criteria, and make payments on the said time periods, or be ready to forego financial leverages such as decrease in fees, or wage garnishment policy. When a stipulated judgment is regulated, it specified the specific terms and conditions in case any of the parties fails to comply with the said policies. In case, a debtor is not able to pay on the scheduled timelines as mentioned in a stipulated judgment, then he or she not only pay the principal amount, but also the interest and other charges thereon.

Bankruptcy and Stipulated Judgments

Though there can be different laws in different provinces, stipulated judgments are said to be dischargeable in case of bankruptcy. There are many debts that are not meant for being waived off in bankruptcy. They include tax obligations, student loans, child support, etc. However, the court can forgive other kinds of loans in the course of bankruptcy. A debtor having a stipulated judgment may have to visit an attorney that is well acquainted with provincial laws and policies concerned with bankruptcy and debt payment.