A default judgment is what happens when a creditor sues you and you don’t respond. It is one of the most preventable — and most damaging — outcomes in debt collection, yet thousands of California consumers receive them every year simply because they didn’t know what to do when they were served.
How Default Judgments Happen
When a creditor files a lawsuit and you are properly served with a summons, you have 30 days to file a written response with the court. If you don’t respond, the court enters judgment in the creditor’s favor by default — without any hearing, without reviewing the merits of the claim, and without any input from you. The creditor wins simply because you didn’t show up.
What a Default Judgment Enables
Once a creditor has a judgment, they can: garnish your wages (up to 25% of disposable income), levy your bank accounts, place a lien on real property you own, and renew the judgment every 10 years. A judgment stays on your credit report for 7 years. Bank levies can happen with very little warning and clean out an account completely.
How to Avoid One
If you are served with a lawsuit, respond within 30 days — even if your response is simply a general denial. A general denial preserves your rights, forces the creditor to prove their case, and opens the door to settlement negotiations. Many cases settle after an answer is filed because the creditor doesn’t want to go through discovery and trial any more than you do.
If You Already Have One
Default judgments can sometimes be vacated if you act quickly and can show you were not properly served or had a valid defense. Consult an attorney immediately if you discover an existing default judgment. The Justice Foundation kit covers the pre-judgment prevention strategies in detail.
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