One common collection method is for a creditor to file a lawsuit against you in order to obtain a judgment from the court ordering you to pay a debt. If a creditor files a legal claim against you to collect a debt, you then have an opportunity to respond to the company’s claims. This response is called an “answer” and must be filed within a certain period of time. If you do not file an answer and you do not show up in court for the scheduled hearing, the creditor can move for the court to enter a default judgment, which is automatically in favor of the creditor.
Once a default judgment is entered, it will not only register on your credit report but will also allow the creditor to obtain permission from the court to levy your bank accounts and use other collection methods that can cause serious financial harm. Often, when you realize the bank account has been frozen is the first time that you even know that a lawsuit was ever filed.
If you suddenly realize that you have a default judgment against you, you should immediately contact an experienced New Jersey debt relief and bankruptcy attorney to discuss your alternatives. There are options for you to have the default judgment set aside, however, you only have a certain amount of time to take action.
Proving Excusable Neglect
One of the primary ways that you can have a default judgment vacated is to prove that you had a good excuse for your neglect to respond to the lawsuit or show up in court (called “excusable neglect”). There are different reasons why such neglect to respond can be excused, including the following:
- The complaint and summons to come to court were served at the wrong address. Since you did not live there, you never received notice of a claim against you.
- You were not in the state at the time the lawsuit was served and, therefore, you did not have a chance to prepare an answer and you were unable to appear in court.
In addition to showing excusable neglect, you must also present a valid defense to the claim in order to have your default judgment vacated.
Call a New Jersey Bankruptcy Lawyer for More Information Today
At the Law Office of John L. Schettino, we have helped many people facing creditor claims and default judgments. Please call us today at 201-498-9768 to discuss your case.