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hi my name is John Skiba and I'm an attorney in the state of Arizona and I help people with their debt problems if you're like many actually most of the people who get sued by a debt buyer you likely didn't respond to the lawsuit and now are faced with the unpleasant reality that a default judgment has been entered against you in fact it's a statistics show that more than 90% of people who are sued by debt buyers don't file a response with the court the danger of allowing a default judgment against you is once this occurs the debt buyer can now garnish your wages or levy or bank accounts so what exactly is a default judgment after you're served a lawsuit you have a certain amount of time to respond usually 20 to 30 days depending on the state that you live in if you don't submit a written answer to the lawsuit the court can enter a default judgment giving the debt buyer everything that they're asking for sometimes people will get served as a lawsuit and don't know what to do so they do nothing other times the debt buyer gets permission to serve a person through the mail and they mail the complaint summons or the wrong address I meet with people every week who are getting their wages garnished and their bank accounts levied and they didn't even know that judgment had been entered against them so if a default judgment has been entered against you what do you do now you do have a few options the first thing you can do is you can ask the court to set aside that default judgment and give you an opportunity you can test it next you can settle the debt with the debt buyer for an amount less of what the default judgment is and finally you can eliminate this judgment completely by filing for bankruptcy let's discuss the first one there you can ask the court to set aside the default judgment if you believe that the default judgment shouldn't have been entered in the first place or that there was some other sort of error you can ask the court to set aside the default judgment and let you fight the lawsuit however just any old reason won't do there are certain basis on which a court can set aside a default judgment the first place you need to look is the Rules of Civil Procedure most states rules based upon are based upon the Federal Rules of Civil Procedure you can look at rule 60 which is usually entitled to relief from a judgment or order or something similar rule 60 provides six reasons that a court can set aside a default judgment the first of why the first one is a mistake inadvertence surprise or excusable neglect two if there's new evidence that has been discovered that you wouldn't be able to find in the prior proceeding the third if there's fraud fourth if the default judgment is actually void fifth if the judgment has been satisfied released or discharged in bankruptcy and six is kind of a catch-all provision just saying any other reason justifying setting it aside regardless of the reason that you're asking the court to set aside the judgment you need to act quickly the longer you wait to ask the court to set aside the judgment the less likely it is that you're actually going to be successful and whether you're successful or not large will depend on the specific facts of your case it's also important understand if you were simply negligent and failing to respond such as you know you forgot you didn't get around to it you didn't feel it was necessary those are all bad excuses and you're not likely gonna be successful in getting that judgment set aside setting aside a judgment can be a difficult process many judges do not like to undo what has already been done however there are serious problems such as you didn't get served with the lawsuit or if you can show that they sued the wrong party you have a good shot at getting the court to reconsider the second thing you can do is settling the judgment if you don't have a good reason to have the judgment set aside or if you've already asked the court to set aside the default judgment and you're not successful then you may want to see if you can settle the judgment now once judgment has been entered you've lost a lot of the leverage that you would have had in settling the debt before they sued you at this point the debt buyer or creditor has taken the time to go through the entire legal process will likely be less willing to settle for a lower amount however in settling a debt you need to establish a budget of what you're able to do either in a lump sum or on a monthly basis if you can afford to pay a large portion of the debt in a one-time lump-sum payment you'll be able to settle for a lot less than if you're wanting the debt buyer to accept payments over time alternatively if you're going to need to pay off the judgment and payments you're likely going to end up most of the judgment amount now the third thing you can do is bankruptcy I meet with clients / debt buyer lawsuits like these I'll ask them if there are other debt issues that they're dealing with because of this lawsuit you're dealing with now is just the tip of the iceberg you may want to consider bankruptcy a chapter 7 bankruptcy will typically eliminate not only the judgment but most of your other debts as well no one wants to file bankruptcy but many times it's the only real option for dealing with your debt problems now I don't mean to sugarcoat it if you have a default judgment against you it can be difficult to get the court to set it aside difficult but not impossible the best option is to avoid the default judgment altogether by in the first place by drafting and finally an answer with the court if you're being sued by a debt buyer or if you have questions on debt collection bankruptcy any of those types of issues head on over to my website as Skiba law.com where I have other articles videos even webinars on these topics that will help you to put together a game plan for dealing with your debt thanks for watching