Strategies for Dealing with Credit Card Default Judgments | Summary and Q&A

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September 29, 2017
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Consumer Warrior
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Strategies for Dealing with Credit Card Default Judgments

TL;DR

This video discusses the problem of default judgments, how they occur, and provides three options for dealing with them: contesting the judgment, settling the claim, or filing for bankruptcy.

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Key Insights

  • 👯 Default judgments are a widespread issue, particularly in cases of debt collection, and many people are unaware of the problem.
  • 🐕‍🦺 The main reason for default judgments is improper or alternative service of the complaint and summons, which often does not provide proper notice to defendants.
  • 👍 Contesting a default judgment requires gathering evidence to prove improper service, and settlement or bankruptcy can be alternative options.
  • 👻 Filing a motion to vacate a default judgment eliminates the judgment itself but does not dismiss the entire lawsuit, allowing the creditor to still try to prove their case.
  • 🏆 Default judgments can cause significant financial stress and frustration, but there are options available for addressing them, such as contesting, settling, or filing for bankruptcy.

Transcript

  • Hey everybody. John Skiba here from the Arizona Consumer Law Group. I'm also a founder of the Consumer Warrior Project. You can learn more about both of those over at ConsumerWarrior.com. In today's video, I want to talk about something that is a plague on society, a financial plague, that a lot of people don't know about. Even a lot of attorneys... Read More

Questions & Answers

Q: What is a default judgment?

A default judgment occurs when an individual fails to respond to a lawsuit within the given timeframe, leading the court to assume agreement with the claims and enter a judgment against them.

Q: Why do default judgments happen?

Default judgments commonly occur due to improper or alternative service of the complaint and summons, where the defendant is not properly informed of the lawsuit and fails to respond within the required timeframe.

Q: How can one contest a default judgment?

To contest a default judgment, one must provide evidence that they were not properly served with the complaint and summons. This can be done by gathering documents such as the affidavit of service and proving that the information provided is incorrect or false.

Q: What are alternative methods of service?

Alternative methods of service are used when personal service is unsuccessful. These methods may include mailing a certified copy of the complaint and summons or posting it on the defendant's door. However, these alternative methods often do not provide sufficient notice to the defendant, leading to default judgments.

Q: Can a default judgment be settled?

It is possible to settle a default judgment by offering a payment to the creditor that is less than the amount they are seeking. However, settlement may be challenging if wage garnishment has already been initiated.

Summary & Key Takeaways

  • Default judgments are a common financial issue, with many people unaware of how they occur and what to do about them.

  • Default judgments are typically entered when individuals fail to respond to a lawsuit within a certain timeframe, resulting in the court assuming agreement with the claims and entering a judgment against them.

  • The most common reason for default judgments is improper or alternative service of the complaint and summons, with over 90% of credit card collection lawsuits resulting in default judgments.

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