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Default Court Judgments
To start a lawsuit, legal papers (called the complaint) must first be served on the defendant. The defendant becomes a debtor when a judge signs an order creating a civil judgment.
If the defendant does not provide an answer within a certain period of time, and/or does not show up on the date of the court hearing, the defendant becomes a debtor, and a default Judgment results.
A default means you won your lawsuit. In many ways, this is good news - the judge ruled in your favor, there were no delays, no extra expenses, and you didn't have to hear or read the debtor's lies in court.
However, a default judgment (where the debtor did not show up) is sometimes a hollow victory. Many debtors do not care about default judgments. This is because the common sense definition of a default, does not apply in civil courts. Most of the time when you default, you lose. In civil court, a default is often a second chance for a debtor to avoid paying a judgment.
Other disadvantages of a default judgment include:
1) If the court notice of the default does not mention a dollar amount, you must get a judge to sign an order to make it an enforceable money judgment.
2) You can't do pre-judgment discovery on the debtor. This means you may have to later do post-judgment discovery to show fraudulent transfers or find the debtor's assets.
3) Default judgments are harder to domesticate (transfer) into some other states. (E.G., Connecticut, New Jersey, and New York). In New York, a new lawsuit is required to domesticate a default judgment there. Some other countries also require an expensive new trial to domesticate a default judgment. It does not matter how good the proof of service is, in NY, you must file a new lawsuit to domesticate a default state judgment in NY.
4) Debtors don't care about default judgments. If they cared, they would have either paid you, or showed up in court to contest your complaint. If you or a judgment enforcer takes their assets, they may suddenly care very much. The most popular way debtors try to avoid paying a judgment is to ask the court to vacate (cancel) the judgment.
If they succeed on a motion to vacate, you lose the judgment, and have to start over with a new trial. The most important issue a judge considers on a motion to vacate, is the proof of service.
The best proof of service is when a Sheriff or a registered process server personally serves the defendant, or serves the correct person at a company. With valid personal service, attempts to have the court vacate the judgment almost never succeed.
Note the debtor can play other games, including filing an answer (e.g.) one day after the deadline, and later try to add that to their (alleged) reasons for the court to grant a motion to vacate the judgment. Judges like to give defendants extra leeway, as they want all sides to have their day in court, even if they defaulted.
You don't get to choose whether your lawsuit results in a default judgment or not. You can choose how carefully you serve the right defendant, and make sure to use a registered process server or a sheriff, to personally serve the defendant.
Sometimes, you just can't personally serve the defendant. In this case, you must have a substitute service done on (e.g) their spouse, or service by publishing in a newspaper (how obsolete). When you have a default judgment with less than perfect proof of personal service, it's considered a weak judgment.
Among default judgments, there are two types. One type is a default judgment entered by the court that is signed by a judge that considered some evidence, including testimony and affidavits.
Another type of default judgment is one where no judge is involved, and a court clerk signs. The court clerk considers the correctness of the paperwork and if an answer was filed by the defendant or not within a time limit. A court clerk default is the weakest kind of default judgment.
One way to "clean up" a weak judgment is to later personally serve the debtor with a post judgment document such as an abstract of judgment, or it could be a memorandum of costs, or the notice of the default judgment, or an order of examination. Six months after a debtor is personally served, they are considered personally aware of the judgment, even if the first service on them was substituted service.
When judgments have substitute service, it's often a good idea to personally serve the debtor something, and wait 6 months before taking aggressive enforcement actions. This will not help in every case, judgments can be vacated for several reasons.
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