What Happens If a Court Denies a Credit Card Default Judgment?

A default judgment is a legal decision reached in court when you fail to respond to a court notice about a lawsuit. The default judgment means you are liable for the debt and must pay the creditor or debt collector. If you refuse, your bank account and wages can be garnished.

Appealing The Judgment

Default judgments can be appealed and the judgment dismissed if the judge accepts your reason for not responding to the lawsuit. Although the default judgment is dismissed, you remain liable for the debt and must respond to the lawsuit as originally instructed by the summons and complaint. A summons is the notification of a lawsuit, and the complaint is the lawsuit itself. Winning the appeal gives you some time to resolve the lawsuit, but the threat of another judgment is high. Illinois Legal Aid reports that it is almost impossible to win in court against the credit card company, meaning winning an appeal of the default judgment is only a temporary victory.

Reasons For Appealing

Some people successfully appeal default judgments by arguing that they were not served with a lawsuit. "The New York Times" reports this does happen occasionally, with some unethical couriers falsifying records to show that a summons was delivered when it was not. Generally, the summons and complaint is hand-delivered to your home or workplace, although in some states it can be left at your home or sent by certified mail.

Debt Settlement

The default judgment stands if the judge denies your appeal. No further appeals are available, and your options are limited. Some people avoid bank or wage garnishment after a judgment by agreeing to settle for the full amount, with a promise from the debt collector that there will be no garnishment activity while you make payments.

Protecting Your Rights

Ignoring delinquent debt is a mistake. Responding early to delinquent debt gives you more options to resolve the issue, including debt settlement for less than the full balance. Delinquent credit card debt can be settled for between 20 and 75 percent of the balance; however, low settlements generally aren't possible after the credit card company wins a judgment.