Default! What to Do If You Default in a Debt Law Suit

If you fail to answer the lawsuit against you on time, the debt collector will ask the judge to enter a “default” judgment against you. This means you have lost the case if you do not take action to reverse it. The company will start to garnish your wages or take your bank accounts if they can find them.

But never fear, all is not lost. For the first thirty days, it is actually fairly easy and almost automatic to reverse a default judgment. In most jurisdictions, all you have to do is tell the court you did not intend to default on the case as a means of somehow abusing the system. Almost any reasonable excuse will work: car failure, misunderstanding of court time or place, inability to obtain a lawyer, etc. I do not suggest that you attempt to deceive the court, simply that the courts are pretty lenient about things for the first thirty days after a judgment is entered.

After thirty days it becomes somewhat more difficult to get rid of a default, but it is still very doable, and you should certainly try it.

Let’s take a step back to understand why. First a definition: the word “default” has two meanings relevant to debt cases. When you fail to make a payment due on a loan, this is known as a “default.” This is not the kind of default I discuss in this article. Rather, the “default” I intend to discuss here is what occurs when you fail to make a defense of a suit on time. This kind of default is not “favored” in the law because it is not a judgment based on the real facts (merits) of the case. Rather, it is made based on a “procedural” mistake. That means that courts are more willing to undo a default than any other kind of judgment. Keep that in mind.

Every jurisdiction has “Rules of Civil Procedure” which outline what you must do to undo a default. Undoing a default is called “setting it aside,” and the name of your motion is “Defendant’s Motion to Set Aside Default Judgment.” In every jurisdiction of which I am aware, for the first thirty days all you must do is allege that you didn’t intend to game the system by defaulting and state that you wish to make a defense. Because the courts do not like judgments based purely on procedural mistakes, they will routinely set aside the default.

After thirty days, the default is harder to set aside. In that case, in most jurisdictions at least, you must actually provide a “good cause” for your failure to answer on time or seek to set aside the default within thirty days, and you must allege facts constituting a defense to the matter brought.