What do I do after a Default Judgment?

default judgmentIn today’s economy, a lot of people are forced to move from place to place – maybe you’ve lost your home in foreclosure, maybe your rent is too high, maybe you lost a job and found another one elsewhere.  Now, when you have been sued, you must be notified of the lawsuit before it can proceed. That means that the person (or credit card company or bank or debt collector) must show that the lawsuit summons has been personally delivered to you – or at least to your actual home or mailing address. Unfortunately, there are a LOT of dishonest debt collectors and unethical collection lawyers who will not bother to make sure they’ve sent the summons to the correct address, and they will proceed with a lawsuit even though notice was never properly delivered to you.

This means that you could have a judgment against you and never even know about it! That is – until they find out where you work and bank and garnish all of your bank accounts and 25% of your paycheck – out of nowhere!

So what do you do when a judgment has been entered against you and you never knew about the lawsuit?

In Alabama, you can set aside a default judgment if you have a good reason: for instance, if you were never served with the lawsuit. But you have to sign a sworn affidavit stating the circumstances of the default, and you also have to be able to show that you may have had a chance at winning if you are given a new trial. This is not hard to do – most collectors ask for more money than you legitimately owe or that they can prove, and so at least the amount of damages can be in dispute.

What it really does is protect your money while you can take some time to make a plan – maybe you can settle with that creditor, maybe you can file bankruptcy and get rid of your debt in an orderly fashion.  But if you’ve been hit with a default judgment that you never saw coming, you need to contact a debtor’s attorney immediately.  Rule 55(c) of the Alabama Rules of Civil Procedure makes it much easier to undo a default judgment if you file a motion within 30 days of the judgment being entered.

If you live in South Alabama and have been hit with a default judgment, contact us to learn about your options for dealing with this – we can help you prevent a financial disaster for your family.