March 10, 2021
Summary: Have a default judgment filed against you as a result of debt collection lawsuit? Find out what you can do about it.
If you have borrowed money or used a credit card that you are unable to pay back, you may have been sued by either your original creditor or a debt buyer. When this happens you will have anywhere from 20 to 30 days to respond to the summons. If you do not respond in time, then you will have a default judgment entered against you.
Also known as a motion for default, having a default judgment placed against you is a method used to expedite cases where you do not show up in court. If you are looking to get out of the default judgment, then you will need to file a motion for default.
When you are given notice of a court case against you, you will be given a specific amount of time to appear in court, as well as file an answer to the suit. Your summons will dictate this timeframe. If you do not respond then you will be given a default judgment.
The default judgment allows the creditor or debt collector to collect the amount that you owe using various methods.
If a motion for default on a debt is filed against you, you run the risk of having your wages garnished and your bank account frozen.
Wage garnishment is a legal procedure where your earnings are court-ordered to be withheld by your employer, to repay debt. Legally, your employer cannot fire you because of this. “Wages” are considered income, salaries, commissions, bonuses, and retirement or pension income.
Another method of collection is done by bank levy. This is essentially freezing your bank account. This allows the debt collector or creditor to freeze your account and take the amount that you owe from your account.
If you believe that the default judgment should not have been entered against you, then you can file a motion to vacate. Essentially, when you file your Motion to Vacate affidavit to Set Aside Default, you are asking them to allow you to go back to court to fight the debt.
After filing a motion for default, you will get a hearing date and time from the court clerk. Although it is not a guarantee that the motion will be accepted, you at least will have a chance.
At the hearing, the judge will decide to grant or deny the motion. If the judge grants your motion, the default or a default judgment will be set aside, and the case will move forward.
Each state varies in its laws, so you will need to look in the Rules of Civil Procedure for your state. Most state's rules are based upon the Federal Rules of Civil Procedure, therefore you should look at Rule 60. This rule states six reasons why a court can set aside a default judgment:
For whatever reason you are asking the court for a motion to set aside the judgment, you will need to take the next steps quickly. The longer you wait to ask for a judgment to be set aside after a motion for default, the less likely they will be willing to do so.
If you do not have a good reason for the judgment to be set aside, then you may want to look into a settlement. Settlements involve either paying off the debt in full or agreeing to pay off the debt over a specific period of time in multiple payments.
Despite this, after a motion to vacate a judgment has been refused, it can be difficult to attempt to settle the debt. At this point, you will have taken up a lot of the creditor or debt collector's time, and therefore they may be less likely to settle for a lower amount.
You will then need to decide if you can afford to settle with one lump sum or with monthly payments. Typically if you choose to settle it in a lump sum, you will be able to do so for a lower amount than if you pay it off over time.
Although bankruptcy should be your last choice when it comes to debt, it is an option. Typically if you are suffering from a variety of debt issues is the only time that you should choose to file bankruptcy.
If you do decide to file for bankruptcy then it will not only eliminate the judgment but also your other debts. It will be a serious hit to your credit and may make it difficult to buy a home or even find a rental unit.
After a motion for default is filed it means you have a judgment entered against you. At this point, you must begin responding and attempt to have the court set it aside. This is truly your only hope to begin fighting the debt once again and to avoid wage garnishment.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
Here's a list of guides for other states.
Being sued by a different debt collector? We're making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.