Ignoring Your Lawsuit Will Lead To A Default Judgment
So you’ve been served with a lawsuit. In most credit card lawsuits you will have 30 days to respond; ie. file an answer to the breach of contract claim. If you ignore the lawsuit and allow the 30 day period to pass the Plaintiff will obtain a default judgment. A default judgment is granted when the Defendant does not show up and is based on a showing of proof by the Plaintiff. Unfortunately for the Defendant, they are not there to challenge the proof of claim if they ignore the lawsuit. Accordingly, the amount of damages awarded through a default judgment can be crippling to the Defendant’s finances.
Once the Plaintiff obtains a default judgment they will secure a writ of execution which gives them permission to execute (collect) on their judgment. Once the writ of execution in hand the Plaintiff will pursue collection though an earnings withholding order (wage garnishment) if the debtor is employed, bank levy if the debtor holds funds in a bank account, or recording an abstract of judgment to place a lien on the Defendant’s real estate.
In order to avoid a default judgment you will need to either file an answer and challenge the lawsuit or pursue bankruptcy. If you are faced with a credit card lawsuit filing an answer may just rack up your bill since the cardholder agreement probably gives the credit card company the right to add collection costs to the final tab. Therefore, many Defendants choose to preempt a default judgment by filing bankruptcy. Once a chapter 7 bankruptcy petition is electronically filed with the court the lawsuit must stop and remain so until the bankruptcy is concluded. If you secure a discharge in bankruptcy the underlying debt behind the lawsuit will be eliminated and the creditor will be prohibited from pursuing collection action on the debt ever again.