My Creditor Has a Default Judgment Against Me! What Now?
How a Creditor Gets a Default Judgment Against You
If a creditor is unable to collect a debt from you, eventually they will file a complaint against you in court. The court issues a summons notifying you of the suit. The plaintiff must then properly serve you with the summons and complaint within the procedures set out by Florida law. In Florida, once you have been served, you have 20 days to file a response with the court if you want to avoid a default judgment.
Should you miss that deadline, the plaintiff will then request the court to order a default judgment against you. This will include the amount you owe, but it will also probably include interest and court costs, so you end up with a judgment against you that is much more than the original debt. Now the creditor has what they need to start proceedings to garnish your wages, attach your bank accounts, put a lien on your home and take other actions to try to get your money.
What Should I Do Now?
When you find out a court has ordered a default judgment against you, act immediately. You need to consult with a good attorney to understand the options available for your situation. You could, of course, accept the judgment and pay the entire amount. You might even be able to negotiate a payment plan. But that’s not the only possibility. Others are
- Try to negotiate a settlement for a lesser amount
- Challenge the default judgment
- Declare bankruptcy
Let’s explore further.
Try to Negotiate a Settlement for a Lesser Amount
You have a whole lot more leverage to negotiate a settlement for less than you owe before a creditor has a judgment against you. However, even once they have a judgment, it may still be possible. It costs time and money to get track down your assets or to find out whether you are collectible at all.
Creditors want to get as much money as possible as fast as possible, so your best chance of a good deal is if you can offer to make a lump sum payment for a smaller amount. However, installments may be possible.
What may tip the scales in your favor is if the creditor is afraid you will file for bankruptcy. That would drastically increase the chances they would end up with nothing. Therefore, if you hire an attorney to try to settle with your creditors, get one who practices bankruptcy law in addition to debt collection defense. This will increase your creditor’s fear you will declare bankruptcy. Your attorney may even be able to strike a deal where you pay only a fraction of what you owe.
Challenge the Default Judgment
Some default judgments never should have been granted, and if that is the case, you may have grounds to have them set aside. You are unlikely to discover these grounds on your own, which is why you should speak with a Florida debt collection defense lawyer. If a court vacates a judgment against you, they can throw the case out or they can reopen it. Even if the court reopens the case, at least you will have an opportunity to defend yourself. That also increases your leverage in negotiating with your creditor.
If you plan to challenge, do it immediately before the window closes when you can do so. Here are some possible challenges:
- You never owed the debt.
- You already paid the debt.
- You were not properly notified of the lawsuit.
- There were significant defects in the creditor’s pleadings.
- The case was mismanaged.
- The creditor is guilty of fraud or other misconduct. You are protected under both federal and Florida law from creditor misconduct.
- You did not respond due to excusable neglect: This is a situation where you didn’t know about the lawsuit or could not respond. For example, if you were hiking across Mongolia, you may not have been aware you were served. If you were critically ill, you may not have been aware you were served and could not have responded even if you had.
If you cannot pay the default judgment, can’t negotiate a settlement and don’t have a good challenge, you may want to consider declaring bankruptcy if the amount is substantial. This is particularly true if you have multiple debts you cannot pay. Once you declare bankruptcy, creditors must cease trying to collect from you.
Don’t Try to Go It Alone
Should you find you have a default judgment against you, immediately contact a Florida debt collection defense lawyer who also practices bankruptcy. Pick up the phone now, not tomorrow or next week. If you wait too long, you can lose your best legal right to challenge the judgment. You can also lose the possibility of settling as your creditor proceeds with garnishment, liens and levies.
Many attorneys offer a free initial consultation so you can get some idea of the merits of your case. Take advantage of that. You need the help of a lawyer to determine \whether the default judgment is correct and then decide what to do from there.
Call Us Immediately if You Have a Default Judgment Against You
If you a court orders a default judgment against you, immediately contact Ziegler Diamond Law: Debt Fighters for a free consultation by submitting this form. We practice both debt collection defense and bankruptcy law. Or just call us directly at (727) 538-4188 in Clearwater, (813) 225-3111 in Tampa or (352) 600-1326 in Mt. Dora. There is no time to waste!