No matter which side of a civil case you’re on, it’s important to understand what a default judgment means to your lawsuit, and what happens next. In this article, we’ll explain the basics of default judgments: what they are, when and how defendants can set them aside, issues related to collection, and more.
What is a Default Judgment?
In a civil lawsuit, a defendant who does not respond to the suit papers in a timely manner is considered “in default.” When the plaintiff makes the required showing of default and offers proof to the court of the amount of money owed, the court will issue a default judgment in the plaintiff's favor. (Learn more about Parties in a Civil Lawsuit.)
At that point, the plaintiff will be entitled to pursue enforcement of the default judgment in accordance with the procedures of the particular jurisdiction where it was obtained -- the rules of the county branch of the state’s civil court, for example.
"Setting Aside" a Default Judgment
In most jurisdictions, the defendant will have a prescribed period within which to ask the court to set the default judgment aside, on good cause shown. In California, the defendant typically has 30 days to make this kind of motion, starting from the date on which the court clerk mailed the Notice of Entry of Judgment. In Florida, there is no specific timeline, but the party requesting relief from the default judgment must do so with “due diligence.”
If the defendant does not seek this relief, or if the defendant is unsuccessful in seeking it, the plaintiff will then be free to attempt to collect the judgment by any lawful means available. Typically, a court's rules governing enforcement of judgments include procedures for wage garnishments, attachment of bank accounts and seizure of assets. The plaintiff can usually pursue more than one of these enforcement mechanisms simultaneously, and the costs incurred in doing so are usually added to the judgment amount.
Collecting on a Default Judgment
As an aid to plaintiffs who are confronted with the challenge of collecting the money owed to them, courts permit default judgment holders to discover facts surrounding the defendant's employment, bank accounts and other assets. In a proceeding known as a “creditor's exam,” the defendant is required to testify under oath and produce documentation about these matters. Some courts also permit the plaintiff to seek an order freezing the defendant's assets to prevent fraudulent transfers that would frustrate collection efforts. The defendant's failure to comply with court orders and subpoenas issued as part of these proceedings may lead to a finding of “contempt of court,” which means possible fines and jail time.
Once the plaintiff learns where the defendant works, where the defendant banks, and what assets are owned in the defendant's name, decisions can then be made as to how the available enforcement tools can best be utilized. For example, if the defendant is a wage earner who receives a regular paycheck, the plaintiff can issue wage garnishments and receive a certain percentage of the defendant's wages. If the plaintiff is able to obtain information about the defendant's bank accounts, garnishment and attachment proceedings can be initiated to reach the assets in these accounts. If the defendant owns vehicles, non-exempt real estate or other items of real or personal property, this property will be subject to seizure by the local law enforcement authorities. Once it is sold, usually at a public auction, the sale proceeds will be available to help satisfy the judgment amount owed.
It is often said that a judgment is only worth the paper it is written on. In many cases, litigants obtain judgments that are difficult (if not impossible)to collect because the defendant either has no assets or has effectively shielded those assets from the reach of creditors. But an understanding of collection options -- and a willingness to spend the time and resources to utilize those options -- will greatly enhance your chance of recovering some, if not all, of the default judgment amount.
Like other kinds of judgments, default judgments will be enforceable for a period of years set by law. Many jurisdictions permit the renewal of judgments that are about to expire, providing additional time for the plaintiff to pursue collection remedies. Unless the defendant tries to discharge the judgment debt by filing for bankruptcy, the cloud of court-authorized actions to enforce the default judgment may well hang over the defendant's head for decades.