What is a Default Judgment? How Does it Affect your Personal Finances?

What is a Default Judgment? How Does it Affect your Personal Finances?

This post is not written to be legal in nature, otherwise it would be a whole heck of a lot more boring, rather I just want to highlight the basics of a Default Judgment and what to do if you find out there is one on your credit report.  I have never practiced in this area, this is no where near an expertise of mine, but rather I was prompted to write this post after helping a couple of my family members, who had a default judgment in their name.

I want to highlight 3 distinct questions, and then I can expand on these areas if questions arise:

  1. What is a default Judgment?
  2. How will a DJ affect your personal finances? and
  3. What to do if you get hit with something like this.

Before we get started, this post is not intended as legal advice, but rather just an introduction into the topic and as a starting point to discuss your situation with your legal or financial professional.

What is a default judgment?

Findlaw, an invaluable resource to those attorneys and non-attorneys, who need a legal definition, defines a default judgment simply as,

a judgment entered by a court after an entry of default against a party for failure to appear, to file a pleading, or to take other required procedural steps

Simply put, a default judgment is nothing more than a judgment obtained because  defendant didn’t show up.  This is the most basic definition and depending on your particular state there may be a more expansive defintion (i.e. a judgment predicated on a failure to produce evidence).

If you purposefully ignored a subpoena then you have a larger hurdle to overcome, but if you have no idea where it came from then continue to question #2.  If you ignored subpoenas and now there is a judgment…get an attorney.  Similarly, I implore anyone reading this,

IF YOU GET ANY LETTER FROM ANY U.S. ATTORNEY DO NOT IGNORE IT

Whenever I someone contacts me about a situation like this, I ask for all correspondence from attorneys, if there are any.  Our constitution affords us the protection of Notice of any suit which is brought against a citizen as such every state has some sort of law associated with notice/service of a subpoena.  Some states let you do a nail and mail (i.e. affix subpoena to the door and then mail a copy – NY Language), some do not, some let you serve people at work, some do not.

How does a DJ affect your personal finances?

A simple google search of Credit Report and Judgment provided a great wiki answer,

The Fair Credit Reporting Act [15 USC Section 1681c]

(a)Information excluded from consumer reports…

(2)…civil judgments…that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

So, 7 years from the date of entry, or longer, if your state has legislation which allows it report longer.

Here is input from others:

* A judgment remains on a consumer’s credit report for 7 years from the “date of entry, or until the governing statute of limitations has expired, whichever is longer”. This time period applies to each legal action. Under certain circumstances and certain state’s laws, judgments can be renewed. The renewal of a judgment would allow it to show on a credit report for 7 years from the date of renewal, if allowed by state law.
* Generally seven, although most judgments are renewable in which case it could be on a cr a very long time. If paid it would be listed as “satified” and be expunged after the 7 years expired.

What do you do if you find out there is a Judgment out there?

Call a licensed attorney and get your butt down to the court house where the judgment was issued and see the pro se department.

Anyone have any experiences?

51 Responses to What is a Default Judgment? How Does it Affect your Personal Finances?

    • Sorry for the delay! It is usually the creditor who will report the outcome of a judgment (default or otherwise) obtained by an attorney

  1. Question I won a personal judgment against a landlord and the judgment was filed with the court how long will that judgment stay in effect.

  2. @ Robert,

    Judgments differ from state to state. My recommendation would be to contact the sherrif’s dept in the county you received the judgment and start asking questions.

    In New York, a judgment is good for 10 years (or at least it was when I was studying for the bar).

  3. What about me, the one who asked for the judgment against someone who owes me money? What happens to the person who said they owed it and would pay it, now I have to pay for it? What can I do to get my money back?

  4. @Tonya,

    To get your money back you are going to have to sue the person to obtain the judgment. For all intents and purposes, a Default Judgment (the point of this post) only happens after you file a lawsuit and the other person doesn’t show up.

    So depending on the amount and your relationship with the debtor…get your butt into court. Many states, municipalities, villages, etc. have some sort of small claims system where you won’t need a lawyer.

    • We have a lawyer (albeit not a great one) who was supposed to go to court a couple of weeks ago to file the judgment. Assuming he has or will, what will we do then? Will a judgment be a means to getting our money back, or just if he tries to buy something?

  5. @Tonya,

    1) Where do you live? If you are in the NY area I can probably recommend someone (NOT ME).

    2) If you have hired a lawyer, he first needs to obtain a judgment. This does not mean he can walk in and demand one from a judge. The other side might have fought back, the other side might have gotten a lawyer themself. There are a million different things that could have happened.

    3) Once a judgment is obtained, in most states, it then needs to be filed. That is a state to state procedure, but one that your lawyer SHOULD handle.

    4) Once filed with the proper authority (i.e. a sheriff) that sheriff can then go seize bank accounts, put a lien on a piece of property, garnish wages, etc.

    The most important thing is – CALL YOUR LAWYER! Open communication with those professionals in your life is HUGE.

  6. HELP! I was served with papers to appear in court for a debt. I have just lost my job and have nothing right now. I have not even received unemployment benefits. I am scared to go to court. What will happen if I ingore this? Can I go to jail? Pleas reply via my emial address

    • Sick,

      DO NOT IGNORE THE SUMMONS AND COMPLAINT! Opening up a default judgment is a much bigger pain in the butt than it is to try and defend. I understand your fear but not showing up is a horrible idea.

      Also you should put in an Answer. Most clerks will help you draft a denial

  7. Evan, thanks..I am going to go face the music…I am Florida…Is it possible the courts will work with me on a better payment plan? I contacted the collection compnay and they wanted a 20% down payment that I dont have

    • Usually the Court will ‘urge’ the attorney to work with the debtor. I know you are hard up for money, and I am not sure the amount of the debt, but be very careful before you sign anything. You also may want to contact Miami Univ Law school and see if they have a free law clinic.

  8. I just pulled a copy of my credit report and found a civil judgment for $2,400 from an apartment complex I walked away from back in 2005. The judgment was not there last year when I checked my credit and I never received any notice or court documents. I only had three months left on my lease, but at the time I had to walk away. I was recently married and we were just started looking into buying a house. Is there anything that I can do? I am willing to pay the balance in full, however I am worried that if I don’t educate myself on every option, I may miss something. I understand that the debt is my responsibility, but I am nervous to go about this situation in the wrong way and be stuck with the Public Record if there is a way to satisfy the debt and still have it removed from my report. Thank you in advance for your advice.

    • Right off the bat, nothing said can be construed as legal advice…with that out of the way,

      I would get my butt to the county clerk’s office or district court (no idea what state you are in) and find your case! Bring lots of quarters and make copies of everything and then you can see where the judgment came from, and your options.

  9. Thank you for your advice Evan. I understand that it can’t be construed as legal advice, but I appreciated your expertise non-the less.

    I live in another state now, but will be going home to visit very soon. I will head strait to the district court to find my case with lots of quarters. Do you think this is something I should speak to a lawyer about or do you think this is something I can handle on my own? Just in your opinion of course. If I do need to speak to a lawyer, do you know what kind of lawyer I should speak with?

    • It all depends on the information you find when you pull your case. I have found on smaller stuff like this it may be useful to do it pro se (on your own in latin talk). Most courts have a pro se dept filled with lawyer to help you out.

      That being said, it is always helpful to talk to an attorney that knows the facts of your case.

  10. Thank you Evan, I appreciate your time and help. I think I will head straight down to the district court office to figure out what is included with my case and see if there is a way for me to do this pro se. :)

  11. in 2002 i was served with papers to go to court for a reposessed car. I was in state prison “california” at the time, so I could not get to court. they expect me to pay them 19,000 dollars for a car i was only paying 12 for ,and they sold at auction for 850.00. the transmissin went out on the car at 60 thousand miles and ford wouldnt grant warranty for said vehicle. any way since i have proof that i was in prison and could not be in court to plead my case ,can i have this judgement overturned after 8 years ?

  12. If the judgment was discharged in a bankruptcy case, Will the judgment still remain on the credit report? In 7 years or whatever the time limit is, can the plaintiff file another lawsuit for the same reasons even if it were discharged in the bankruptcy? TIA!

  13. It was three years ago now,court mail me notice(Summon)Filed by Complainant against me,myself failed to appear court at the time of hearing then following weeks,they brought our case to a judge,to be perform live on show,i was scared cuz i didnt know what to do,this will keep me thinking of these horrible dream.i cant sleep so i realize to opened up and face this.Does will effect this with my applying for Citizenship, and what attorney should i look for related to my case about,Pls help tnx

  14. this is from a california superior court info sheet:.it states filing an answer in debt collection cases. filling an answer is sometimes a good idea and sometimes not. the purpose of filing an answer is to allow you to argue in court that you do not ow the debt. i f you do not owe the debt or if you believe you have a good defense to the debt then you should probably file an answer. being too broke to pay the debt is not a defense to the debt . if you can’t afford to pay your debts then bankruptcy may be a good option for you. there is a filinf fee to file an answer which can cost over 300 dollars. if an answer is filed and you lose , the plaintiff may ask the court for you to pay the actual attorney fees which may range from $250-$350/hr. you lose and get a default payment DO NOT make any payments before there is a judgment. they wont give you credit for moneys paid.

  15. I was served with a default judgment on a credit card debit back in 2008. In 2008 my husband lost his job, not to mentioned had back surgery during this year, was out for over 1 1/2 year recovery. Not to mentioned seeking employment. Drained our saving not to mentioned our 401K. :( I attempted to pay off all our credit cards, as much as I could without filing bankrupt. Today, I contact the firm who agreed to settled for close to half the amount. Thank you Lord!

    I’ve read on other sites that there are ways to get these judgments off our credit reports by contacting Lexington Law. Is this a firm that will “really” take off these types records off our reports or is this a scam? I’m not in a financial situation, and I need I some legal advise. Lexington Law will more than likely tell me that they can. Your not with Lexington Law?
    Respectfully Submitted,

    • “Today, I contact the firm who agreed to settled for close to half the amount. Thank you Lord!”
      - That is wonderful news.

      “I’m not in a financial situation, and I need I some legal advise.”
      - I can’t offer you legal advice I am just a little blogger probably halfway around the country. But what I can tell you is that it may be prudent just trying to contact the credit bureau’s directly (in writing) and asking them to remove the items you aren’t sure are correct.

      I AM NOT WITH LEXINGTON LAW AND I DON’T KNOW ANYTHING ABOUT THE COMPANY.

  16. ANYONE IS AWARE HOW TO HANDLE? MY BANK ACCOUNT SENT ME A LETTER THAT THE ENTIRE ACCOUNT IS FROZEN AND A I CALLED THEM THEY SAID THEY GOT A RESTRAING NOTICE FROM AN ATTORNEY IN NY “PANTERIS & PANTERIS LLP” WE NEVER GOT ANYTHING IN THE MAIL NOR I WAS EVER SERVED WITH ANY DOCUMENTS….WHAT AM I SUPPOSE TO DO NOW?
    THANK YOU
    VIC

    • NOTHING on this site should be construed as legal advice, but IF I were you I would go to the county where the judgment was entered and ask for help.

  17. I had filed a siut in small claims court against somebody that owed me money and since they haven’t responded within 30 days after they were served by the sheriff’s office I was able to get a default judgement against them. However it seems like I am the one who has to do a lot more work to try to collect the money from this person… What is my next step? I don’t know where the person works now but I know their home address and their bank information – since they also wrote me a NSF check not too long ago. How can I make sure I sart getting the money that is owed to me?

  18. I have a question there is a judgment against me for not paying a credit card bill. I was enrolled with a co. called Credit solutions they were supposed to help me settle my debts but never did. they told me to ignore letters and phone calls so I did. Now I have been served and finally they have put a default judgment on me. I received notice of this about 3 months ago and I have not done anything what is your advice. I am really afraid of being arrested or having my wages taken from me.

  19. PLEASE HELP ME.

    I was in an accident in 2003 in Denver, CO where i used to live. I drove someone’s car to take them home because they had been drinking. I live in GA now and my driver licence is suspended in CO and i have a default judgment for $8,886 but now it went up tp $14,000 and my driver licence is still suspended. The owner of the car is ignoring me because he knows what he has done and i am stuck with NO DRIVER LICENCE. Please inform me what kind of lawyer i need to get and what i should do?

  20. I invested in a roofing company in Port Charlotte, FL. 5 years ago. Things went bad and the owner threatened me with a gun to leave his city. Having a new wife and baby I fled the state. He sued me claiming I stole $5 million dollars from the company. A completely bogus claim. Well, the LLC I formed to protect myself got served to appear in court to face charges. At the time I didn’t have the money to hire an attorney. Plus, I feared for my life to even go back to Port Charlotte. So, I didn’t show up figuring the lawsuit was against the LLC and I could just file bankruptcy for the LLC and be okay. Fast forward four years later and I have a $5 million dollar default judgment against me. Can anyone (Florida attorney) help me? I used almost all of my dad’s precious retirement money to try and get back in front of a judge to plead my case. I have proof they submitted false info to the judge to get the default judgment. Even have them under oath in a deposition admitting that they skewed the numbers. However, I can’t even get a judge to let me plead/prove my case. I’m 100% innocent. Never took a dime from anyone, ever! I even filed my response within the 365 day time frame they allow you. However, it seems like someone on the inside is in cahoots with this evil person who files the suit. Besides, the original lawsuit said ” CW Haber vs. American Restoration LLC”. NOT ” CW Haber vs. “my name”. Isn’t that a clerical error that can open the case back up for me? Isn’t there some way I can get my say in this? Show the judge the deposition where they admitted to submitting skewed numbers during the original court hearing? Please somebody help me. I have nothing left. I’m stressed. A $5 million default judgment against me and I’m 100% innocent! Can any attorney help me? I seriously feel like I have a huge lawsuit against the state of Florida for mislabeling the civil process. It didn’t say my name. It said my LLC which should protect me right? Does anyone know how long the default judgment lasts? Will I ever have a chance down the road to show the judge they obtained the judgment by fraud? I’m so broken. I have two small kids. I don’t know what to do.

  21. I had a judgement for my car. Have been paying on it via wage garnishment. It was removed from my credit report last December. Here is my concern;
    1) The court has a different balance than the creditor (the court is less). If I pay off at the court will the creditor refile for balance. Did the court make a mistake?
    2) I tried to settle with the creditor a few days ago to see if they’ll accept a lessor amount that the court. Evidently they pulled up my credit as the lady told me that settlement was denied and the in the middle of the conversation she says ‘you have a good credit rating’. Can they report to the credit bereaus that the judgement is not satisfied and put the judgment or collection back on my credit report?

    • Mia,

      I don’t know the answer to your specific questions, but what I would do is get a copy of:
      1) All 3 credit reports
      2) All Court Documents associated with the loan and eventual judgment

  22. My ex sued me for over paid child support I started to pay him but became unemployed we had an agrement if I became unempoyed he would wait. He filed a judgment again me for the total amount of money owed to him and not the balcance due. How will this affect me personally. and what can i do

    • You can’t just file a judgment against someone, did you receive Service? Did he serve you with a subpoena? If not get down to the courthouse asap and ask the clerk (VERY NICELY) what is the process in your jurisdiction on how to open a judgment.

  23. I recently saw this entry on a docket.
    What does this mean? or do to the person this entry was for?
    There were two defendents, one got a lawyer and settled out of court. This entry was for the defendent who ignored the letter to appear in court.
    “Order on motion for default judgment against : …it is so ordered this 25th day of August 2011 that a default judgment is entered in favor of the plaintiff, and against defendant in the sum of $34000.00, plus post judgment costs at the legal rate plus court costs
    s/ judge (copy mailed to defendent)”
    Thank you…

    • It means that the Defendant didn’t show up to court and the Plaintiff asked The Court (motion) for a Default Judgment which was so ordered.

      Defendant has to respond to the judgement if not it will be entered with The Court or The Sheriff and action will be taken.

  24. I was awarded a civil judgement. Its been 30 days with no payment from defendants. I want to file the judgement so it goes on the defendant’s credit. I am getting the run around from which county to file the judgement in. I assumed that it has to be filed in the county in which the judgement was awarded, however this county is telling me that it is unlikely to appear on the defendants credit because they live in a neighboring county and “searches” for credit are done by the county where you reside. This makes absolutley no sense to me. What does it matter what county the judgement is filed in? It all goes to the same place right? I guess my question is how do judgements get put on a persons credit? and is it realistic that if I file in the wrong county creditors will never see the judgement?

  25. I sued my landlord for my security deposit, libel because he witheld rent checks and caused me to lose my job due to too many times in court and also sued for disturbance of peace from tenants whom he chose to speak to about this disturbance for 4 years. I was granted a default judgement because he nor his lawyer came to court so what does this mean in terms of collecting the judgement? Is this a delay tactic and could there be a reason for me losing judgement down the road?

    • Not that I can provide any legal advice…but what I would do if I were you is bring your judgment to county clerk’s office and ask them what to do.

  26. I was award a default judgement last June 3 2011.for $714,000.00 I spoke with my attoney back in September about my case all he told me is it was going to take along time. well it only took a year and a half to go to court, what do I need to do from here. also the person that did this to me they caught him in my tractor truck they brought him in and talk to him and few days later I spoke with the detective to find out what they gonna do. I was told they are letting him go because he is illiterate. Can I file a law suit against the police dept for no’t doing there job.they also so told my attorney the same thing I need a good attorney to help the statue of limitation is still good.Please help in Dallas,TX

  27. I have a default judgement against me. I am self employed. What is the likelihood that the creditor will go through the work to find what money I may have in my personal and business account and get a court order to take the funds? Would it help if I moved any money to my wife’s account?

  28. Question: I just received phone messages about a debt for cc, the law firm indicated they have trying to serve me but I have NOT received anything. How do I know when my court date is and what county they are trying to file a judgement against me?! Any help is appreciated! Thanks.

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