All too often a judgment debtor (a person against whom a judgment has been entered) finds out about the judgment when his or her bank account gets frozen, or restrained. One day you may just receive a notice from your bank that your accounts are being restrained because of a default judgment that you never knew about. A default judgment is a judgment that is entered against you because you failed to appear in court or answer a summons and complaint.
If you are like most people, you may be wondering, how can this happen? This happens because many creditors use unscrupulous debt-collection tactics, which often include retaining debt-collection attorneys known for obtaining default judgments by way of improper service of papers. This is sometimes referred to as “sewer service” or “gutter service,” because in far too many instances the process server (the person hired by the debt-collection lawyers to serve you with the summons and complaint) will simply discard the papers and falsely swear in an affidavit that you were properly served. This saves the process server the time and effort involved in honestly doing his job; it also deprives you of your day in court because you will never know that you are being sued.
Sewer service has been the subject of many lawsuits and criminal prosecutions; and virtually all of the major debt-collection law firms have been implicated to one extent or another. It has been said that if it were not for default judgments, many debt-collection lawyers would have no judgments at all. This is probably an exaggeration, but not by much. Still, debt-collection lawyers continue to use process servers who intentionally fail to serve papers and falsely swear that they did. Debt-collection law firms often claim that they are innocent of wrongdoing because they cannot know what their process servers are doing. This claim of ignorance is somewhat disingenuous, since debt-collection attorneys know that they are being billed by, and paying, process servers way too little to expect that they are actually doing their jobs; and debt-collection attorneys also can see that the number of judgments they take by default so far exceeds the number of judgments awarded on the merits of the case that suspicion should be raised.
So what can you do when you find out your bank account has been restrained by a default judgment you knew nothing about? The first thing you should do is consult with and retain an experienced and knowledgeable debt-collection defense attorney. Your attorney will immediately prepare and file an order to show cause. This is a type of motion seeking to vacate the default judgment and to allow you your day in court. Once the judge signs it and it is served on the creditor’s debt-collection law firm and the sheriff, they will be prohibited by law from continuing to enforce the default judgment until the judge decides your motion to vacate it.
It is public policy that cases be decided on their merits, and courts generally disfavor default judgments. So if you can state to the court both a reasonable excuse for having defaulted and a meritorious defense to the claims of the plaintiff, the court will vacate the default judgment and permit you to answer the complaint and have your day in court. Debt-collection law firms know this; and the smart ones will stipulate (formally agree in writing) to the court vacating the default judgment and allowing you to answer the complaint. However, since many debt-collection lawyers also know that they do not stand much of a chance of winning a judgment on the merits, especially when the defendant is represented by an experienced debt-collection defense lawyer, they will oppose your efforts to vacate the default judgment in a desperate effort to hang on to it. This usually fails and wastes everyone’s time, including that of the court.
Even if your judgment creditor is collecting a legitimate debt, there are many types of income sources that are protected from garnishment. Some examples include:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veterans’ Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members’ Pay
- Military Annuities and Survivors’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen’s and Harbor Workers’ Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
If your bank account contains funds from one of these types of protected income sources, you may be able to cease, or drastically limit garnishment.
Once the default judgment is vacated, the restraints on your bank accounts will be released and you will have access to your money. You will also have the obligation to defend yourself in the matter. It will be as though the hands of time were turned back to the moment you were alleged to have been served with the summons and complaint. You will have to serve and file an answer to the complaint; and there will likely be discovery (exchange of documents and evidence) and more motions. You will not have to worry about any of this, or take any action, however, because these are all things your debt-collection defense attorney will handle for you. Once all of that is out of the way, the matter will proceed to trial. If the creditor cannot prove its case at trial, you will win. So if you should discover that a default judgment has been entered against you, the first thing to do is retain an experienced debt-collection defense attorney to help you.Have a Question? Leave a Comment Below.