What is a Judgment?
A judgment is the final decisive act of a court in defining the rights of the parties. It includes a decree and any order from which an appeal lies. The proper term is Court Judgment. Other terms commonly used include, default judgment, civil judgment, foreign judgment, and judgment proof.
What are Default Judgments?
The term "default" refers to a "failure to act" and the term "judgment" (often misspelled as judgement) means the "final disposition in a legal proceeding". When dealing with credit and debt collection issues, default judgments are typically granted because the debtor fails to act; usually by not paying a debt and then by failing to show up in court. When you fail to appear in court, the judge usually grants the collector a default judgment.
If you receive a court appearance notice DO NOT ignore it! The only way to protect yourself is to appear in court and present the judge with your side of the story. Go to court prepared to show your good faith efforts in resolving the issue or, in asking for relief in the case of an expired statute of limitations.
If you receive a notice that a default judgment has been issued against you, and you were not aware of the court date, immediately go to the court and request copies of all the paperwork. Look for any mistake or misinformation such as an old or wrong address. If you find something wrong contact an attorney and ask for a rehearing. If you can show that you were not given due process, the judge might just overturn the judgment and then require the collector to file the case properly. Even better is if the debt has expired and you mention the expired statute of limitations, the judge might even dismiss the case.
This term actually means to "overrule" a lower court's decision. When debt collectors win a default judgment, it's possible to have it overturned, overruled, set aside and vacated. These terms simply mean the default judgment is removed and is no longer binding.
In order to have a default judgment overturned, you'll need to prove that the judgment was granted without you being given due process. This generally means you were not able to appear in court for various reasons and therefore, not able to properly defend yourself. Obtain a copy of ALL court documents concerning the default judgment and look them over for any mistakes. Pay close attention to address, notification procedures, dates and names.
If you can prove that you were not properly notified or that some emergency prevented you from appearing in court, request a rehearing also called a motion to vacate judgment.
It is possible for a foreign judgment to be brought against you and for it to be enforced! The United States has international agreements with several foreign countries they and the US honors each country's judgments. Enforcing a child support judgment is a good example. Also, the term foreign judgment can be used when describing a judgment from one state that someone is trying to enforce in another state. For example, a judgment rendered in NY can be domesticated (moved) to Arizona and enforced.
You may be considered "Judgment Proof" during periods of unemployment or while drawing disability pay or disability retired pay. Also, if you have no assets such as home, car, land, and other big-ticket items. In other words, you have no money and can prove it!
Never ignore a lawsuit just because you are broke or have no assets! If a debt collector or creditor is trying to sue and you believe that you are judgment proof, you must respond to the lawsuit as such. Failure to appear and show the judge why you are judgment proof opens the door for the judge to grant the collector a "default judgment".
Even though they cannot collect anything from you now, they can wait many years and try again. Also, the judgment will show up on your credit report.