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1. My question is if I pay the collection agency, who is handling this for the hospital, before I go to court on May 4. Will the final outcome of the court case be dismissed.
In order to make sure this happens, you will need the creditor to agree to file what is known as a Joint motion for non-suit with prejudice in exchange for your payment. Filing that after the set aside will make sure that there is no judgment hitting your credit report.
2. Resulting in I will have the paperwork to have this removed from my credit report.
If it is on your credit report now, once the court sets aside the judgment and enters non-suit it may take about 6 months for it to come off.http://www.in.gov/judiciary/files/motion-dismiss.pdfUse the sample above as a go-by and make sure both parties sign off on it and make it a joint motion.