What is a stipulated judgment?
A “stipulated judgment” – which is sometimes also called a “consent judgment” – is a voluntary agreement between the parties involved in a legal dispute that operates to settle the case. First, each party specifically states – or “stipulates” – in a signed writing that they wish to be legally bound by the terms of the agreement. That agreement is then brought to a judge, who reviews it to make sure that its content is consistent with the law and is fair to both parties. Once the judge has approved the agreement, it becomes an official judgment of the court, which means that the parties must obey it.
What are the benefits of a stipulated judgment?
A stipulated judgment allows the parties to a legal dispute to settle their case without spending the time and money involved in a trial.
What are the risks of a stipulated judgment?
A stipulated judgment is legally binding – which means that once a judge has approved the agreement, both parties lose the right to take the matter to trial if they later change their minds or learn that the agreement was not what they thought it was. (There are exceptions, but this is the general rule.)
PLEASE NOTE: This is why you should never agree to a stipulated judgment – or sign any other potentially legally binding document – without first reading it over incredibly carefully. If you are at all unsure as to what the consequences of agreeing to a stipulated judgment will be, you should have an attorney review it.
When are stipulated judgments used?
Stipulated judgments are used in many different contexts. Here are just a few of them (described in very general terms):
Consumer law (e.g., debt repayment)
A creditor to whom a consumer owes a debt may ask the consumer (the debtor) to agree to a settlement that includes a stipulated judgment.
A stipulated judgment allows the creditor to avoid the time and expense of going to court but it also ensures that the debtor will be legally bound to fulfill the repayment agreement. A stipulated judgment allows the debtor to agree to pay a lump sum or to make a monthly payment without fear that the creditor will take the debtor to court. Both sides get certainty and avoid the burdens of a trial.
The agreed-to repayment amount usually is less than what is actually owed and the stipulated judgment includes an agreement that says that if the debtor breaks the agreement (defaults), then the entirety of the original debt will be due.
Debtors should be wary of entering into any agreement that does not expressly state that the interest rate will be 0% and that the creditor may only file the stipulated judgment with the court if and when the debtor defaults. Any debtor considering settling with a creditor would be wise to seek the advice of an attorney before signing any document.
Family law (e.g., divorce and related matters)
Divorcing spouses who are in complete agreement about the terms of their divorce – a situation that is sometimes called an “uncontested” divorce – may submit a stipulated judgment to the court rather than go to trial.
The stipulated judgment must list each of the agreements between the two parties relating to the division of property, the division of debts, spousal support, child support, child custody, parental visitation, and all other pertinent matters. It must also be signed by both parties.
Landlord-tenant law (e.g., eviction)
Under the Arizona Rules of Procedure for Eviction Actions (17B A.R.S. Rules Proc. Evic. Act.), a court may accept a stipulated judgment in the case of an eviction if the tenant being evicted (the defendant) (1) received proper notice and was given an opportunity to pay all rent owed or fix whatever other problem resulted in a material breach of the rental agreement and (2) was properly served with the summons and complaint by the landlord as described by Rule 13(a) and consistent with the Arizona Residential Landlord and Tenant Act (A.R.S. Title 33 Chapter 10).
The document signed by the tenant being evicted (the defendant) must contain the following warning:
Read carefully! By signing below, you are consenting to the terms of a judgment against you. You may be evicted as a result of this judgment, the judgment may appear on your credit report, and you may NOT stay at the rental property, even if the amount of the judgment is paid in full, without your landlord’s express consent.