You should have an attorney look at it and perhaps the judgment can be vacated (even though it was dismissed there's something going on there). At the very least an attorney may be able to help settle this for lower payments. A full review of the case documents may shed some light on it.
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I think you are confusing your terminology. A judgment cannot be dismissed. It is court order, a creditor cannot dismiss it without prejudice or otherwise. If you paid them, they might file a satisfaction of judgment, but that's not a dismissal.
A judgment is good for typically around 10 years (varies by state) and can usually be renewed. So if they have a judgment against you they can attempt to garnish your paycheck or levy your bank account at anytime during that period.
I have no idea what they would have dismissed, but dismissal without prejudice means that they can renew whatever claim they may have as long is it within the statutes of limitations, so whatever you have does not likely carry any weight. My guess is that they dismissed the suit the first time because they realized you didn't live there and then somehow got a default judgment somewhere else. Whether or not that is legal depends on more facts than you have provided. I would recommend contacting a local consumer protection attorney.
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