What If an Order for Default Was Entered Against You?

A default judgment happens when you don’t respond to a debt lawsuit. The court rules against you without hearing your side. You lose automatically because you failed to defend yourself.

Creditors and debt collectors file these lawsuits regularly. When you ignore the complaint, judges have no choice but to rule in their favor. The consequences are severe and immediate.

Default judgments allow creditors to garnish your wages. They can freeze your bank account and take your money. You need to act fast to protect yourself.

Why Default Judgments Happen

You might not have known about the lawsuit at all. Debt collectors sometimes use improper service methods. They may send papers to an old address or claim they served you when they didn’t.

Many people receive the lawsuit but feel overwhelmed. They don’t know how to respond, so they do nothing. Others think ignoring the problem will make it go away. It won’t.

Some debtors believe they can’t afford an attorney. They assume fighting back is pointless. Our partner Solo helps you respond to lawsuits without expensive legal fees.

Gather All Information About Your Debt

Debt gets sold and resold multiple times. Each transfer creates opportunities for errors. You need to verify the debt is actually yours.

Collect every document related to this debt. Find your original bills and statements. Get copies of notices from the debt collector.

Request a validation letter if you haven’t received one. Obtain all court documents related to the lawsuit. Missing documentation could mean your rights were violated.

Debt collectors must prove they own your debt. They must show the amount is correct. If they can’t provide this proof, you have grounds to challenge the judgment.

Choose Your Next Move

You have four options after a default judgment. Each path has different consequences and requirements.

Accept and Pay the Judgment

You can pay the full amount as a lump sum. The judgment disappears once you pay it off. Your credit report will show the judgment as satisfied.

Paying doesn’t remove the judgment immediately. It stays on your credit report for seven years. The damage to your credit score remains significant.

Settle for Less Than You Owe

Debt collectors often buy debts for pennies on the dollar. They might accept 40% to 60% of the total amount. You need cash upfront to make this work.

Creditors fear you’ll file bankruptcy and they’ll get nothing. Use this as leverage when negotiating. Even mentioning bankruptcy can motivate them to settle.

Get any settlement agreement in writing before paying. Make sure it states the debt will be satisfied in full. Never send money without written confirmation.

Challenge the Default Judgment

You can ask the court to vacate or set aside the judgment. Courts do this when proper procedures weren’t followed. You need valid legal grounds to succeed.

Common reasons to challenge include improper service of the lawsuit. Maybe you never received the complaint. Perhaps the debt collector can’t prove they own the debt.

You might also challenge if the amount is wrong. Statute of limitations violations are another valid defense. Our partner Solo helps you identify defenses and file the right paperwork.

Consider Debt Relief Options

Bankruptcy stops collection efforts immediately. Chapter 7 can eliminate the debt entirely. Chapter 13 creates a manageable payment plan.

Bankruptcy affects your credit, but so does a judgment. Sometimes bankruptcy is your best path forward. You can rebuild your credit faster than you think.

Act Before Garnishment Starts

Creditors can start garnishing wages within 30 days of judgment. Bank account levies happen just as quickly. You have limited time to respond.

If you claim “excusable neglect,” you have six months to act. Excusable neglect includes serious illness or being out of the country. After six months, your options become more limited.

You typically have two years to challenge a default judgment. State laws vary on exact timeframes. Check your state’s rules immediately.

Every day matters when facing garnishment. Your paycheck could be seized without warning. Your bank account could be frozen tomorrow.

File a Motion to Vacate

A motion to vacate asks the court to cancel the judgment. You must file this motion in the same court that issued the judgment. You need to explain why the court should give you another chance.

Valid reasons include never receiving proper notice of the lawsuit. Improper service is a strong argument. So is having a valid defense to the debt.

You’ll need to file your motion quickly. Attach evidence supporting your claim. Include your proposed Answer to the original complaint.

The court will schedule a hearing on your motion. You must appear at this hearing. Bring all your documentation and be prepared to explain your situation.

Prepare Your Defense

Even if the court vacates the judgment, the lawsuit continues. You still need to defend yourself against the debt claim. Start building your defense immediately.

Common defenses include statute of limitations violations. Each state has time limits for filing debt lawsuits. If the debt is too old, the collector can’t sue.

Question whether the collector can prove they own the debt. They must show a complete chain of ownership. Missing links in the chain weaken their case.

Challenge the amount they claim you owe. Debt collectors add excessive fees and interest. They often can’t document how they calculated the total.

Protect Your Assets Now

While fighting the judgment, protect what you can. Some income is exempt from garnishment. Social Security benefits can’t be garnished for most debts. Neither can SSI or disability payments.

Check your state’s exemption laws for bank accounts. Some states protect a minimum balance. You might be able to shield some of your money.

Wages are partially protected in every state. Federal law limits garnishment to 25% of disposable earnings. Some states provide even more protection.

Open a new bank account if needed. Don’t keep large balances where creditors can find them. Keep only what you need for immediate bills.

Learn From This Experience

Never ignore a lawsuit again. Responding is easier than fixing a default judgment. You have rights even when you owe money.

Debt collectors count on you not responding. They win most cases by default. Fighting back levels the playing field.

Keep your address updated with creditors and courts. Make sure you receive important legal documents. Check your mail regularly for court papers.

Get help early when you’re sued. Waiting makes everything harder. Our partner Solo guides you through responding to debt collectors and settling cases before judgment.