A default judgment is issued by a judge after you fail to respond to a summons regarding a lawsuit. Lawsuits are sometimes used to collect on delinquent credit card accounts that have been charged off and turned over to a debt collection agency. A summons is a written document notifying you of a lawsuit. The lawsuit is called a complaint and is attached to the summons. The summons and complaint can be hand-delivered to you by a courier, or in some states left at your home or sent by certified mail.
Time to Respond
The summons offers specific instructions for responding. It may order you to appear in court on a certain date for a hearing before a judge. Or it it may instruct you to respond to the lawsuit in writing within a specific amount of time, such as within 20 days of receiving the lawsuit. A default judgment is entered if you fail to show for the hearing or you do not provide a written response, as requested in the summons.
Consequences
A default judgment can create dire consequences, but because it orders you to pay a specific amount of money. In a credit card case that means the entire remaining balance on the account plus attorney's fees and court costs. If you fail to pay the judgment or make payment arrangements the attorney filing suit against you can request garnishment of your bank account or wages.
Powerful Strategy
Credit card companies and other creditors file lawsuits knowing a percentage of people won't show up in court or respond in writing to the summons. The companies know this leads to easy wins in court and a free path to garnishment. The New York Times reports that many people fail to even realize that a judgment has been entered against them until they discover that their checking accounts have been frozen because of a garnishment order. Bank garnishment allows the creditor or debt collector to freely withdraw money from your bank account until the judgment is paid in full. While the account is being garnished the bank will allow you to only deposit money. Any checks you write will bounce, and your debit card will be declined.
Appealing Default Judgment
The stakes are so high with a default judgment and possible garnishment that you really should get an attorney to help you. Charitable organizations such as the United Way or Salvation Army can guide you to possible legal help from a local attorney affiliated with Legal Aid or a similar organization. Depending on your income, you may qualify for free assistance. If you decide to represent yourself, you must visit small claims court in your county and enter a Notice of Motion to Vacate Judgment. The form is available from a court clerk.
Reason For Appealing
The form will ask you to list a specific reason for not responding to the lawsuit. You can indicate that you were never served with the lawsuit and knew nothing about it. The New York Times reports that this does happen as some unethical couriers will indicate that the lawsuit was served when it actually wasn't. Or you can indicate that you were sick or in a car accident or something else. A judge will review your request and approve or deny it. If the default judgment is vacated a new court hearing will be scheduled or you will be given more time to submit an answer. The judgment stands if your motion is denied.
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