Insight

Default Judgments – Avoid Them at All Costs: Ten Bad Things That Could Happen to You

Default Judgments – Avoid Them at All Costs: Ten Bad Things That Could Happen to You

Eric B. Smith

Eric B. Smith

June 2, 2023 01:59 PM

So, you have been sued. There is usually a flurry of different reactions – “it’s all lies;” “he finally filed suit; “she wasn’t bluffing; “I don’t have anything for them to take;” or, that old chestnut, “we can still work it out.” These reactions are all the same, whether the suit arises from a business transaction, or among business associates, or family, or from a real estate matter.

The first response to a lawsuit filed against you should be to retain an attorney. It is not an option to ignore a lawsuit, and you have just twenty (20) days to respond. It is folly to believe that another party has hired a lawyer to file a claim against you, paid the court costs, put it on the public record and directed the Sheriff to serve the suit on you, only to let it all go and, at that point, “work it out.” At that moment, it is incredibly important that you act immediately to protect yourself and engage counsel. The time of bluffing, or ‘working it out’ has passed, at least for the moment.

If the initial twenty (20) day period had passed and you have been given the required ten (10) day notice, you should take immediate steps to retain counsel.

Failing to take a complaint filed against you seriously could have costly, possibly permanent, long-term financial, personal and business repercussions. Avoid allowing a default judgment to be entered against you at all costs.

Below are ten (10) bad things that could happen when a default judgment is entered against you:

  1. All facts in the complaint are deemed to be conclusively admitted by you, whether accurate or not, and whether you agree with those facts or not;
  2. If the complaint concerns a fixed amount of money, the default judgment will be entered against you in that amount, including court costs;
  3. Even if you have a winning defense, you will be unable to present it if you are under a default judgment;
  4. If the complaint concerns damages that are undetermined, there will be a second hearing to “assess damages” and, if you fail to appear, damages proven by the plaintiff will be assessed against you, without your defense;
  5. The amount of damages assessed in the default judgment is immediately a lien against all real estate you own within the county in which the default is entered, and in counties to which the plaintiff transfers the judgment, allowing the plaintiff to sell that real estate at a Sheriff’s Sale;
  6. As soon as a default is entered, plaintiff may send questions to be answered under oath (interrogatories in aid of execution) to you to locate assets belonging to you;
  7. The Sheriff may be authorized by the plaintiff to put the lien of the Court (attachment) on certain of your non-real estate assets;
  8. The plaintiff may send questions to be answered under oath (garnishment interrogatories) to any financial institution, including Paypal and Venmo, or other entity or person who may hold your assets or who owe you payment, such as your bank, tenants, dividend reinvestment plans, and brokerage services;
  9. The plaintiff, through the garnishment process, may seize your bank, brokerage, stock, bond, cryptocurrency and other financial accounts; and
  10. The Court may enter an order allowing the Sheriff to take other action against you, including, for example, directing the seizure or sale of your personal property, contents of your home or office, automobiles, non-publicly traded stocks and interests in partnerships and limited liability companies, seizure of rent or payments due to you and also ejecting you from real estate or determining your legal rights regarding real estate, or ownership of personal property, including stocks or your interest in your own company!

As further bad news, default judgments just don’t ‘go away,’ the lien of a default judgment, like other judgments, lasts five years and the lien may be easily and repeatedly revived, indefinitely, and may be transferred to other counties and other states.

If a default judgment has been entered against you, you must act fast to open the judgment, generally, within ten (10) days of the entry of the judgment, or there must be a defect on the face of the record that would warrant a Court striking the judgment. Of course, following this process does not guarantee that a Court will open or strike a judgment, leaving only the route of an appeal from a denial of a motion to open or strike.

All of this is an expensive process that could have been avoided with a timely response to the suit.

If you are sued, timely retain counsel and defend the action; if you are defaulted, retain counsel and timely take steps to open or strike the default. Bad things could happen if you don’t. Avoid allowing a default judgment to be entered against you at all costs.

Questions regarding this article and default judgments may be directed to Eric B. Smith, Esquire, 215-540-2653 or esmith@timoneyknox.com.

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Presenting the 2025 Best Lawyers Editions in Chile, Colombia, Peru and Puerto Rico


by Jennifer Verta

Celebrating top legal professionals in South America and the Caribbean.

Flags of Puerto Rico, Chile, Colombia, and Peru, representing countries featured in the Best Lawyers

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias


by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Things to Do Before a Car Accident Happens to You


by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery


by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Is Premises Liability the Same as Negligence?


by Jeremy Wilson and Taylor Rodney Marks

In today's age, we are always on the move, often inhabiting spaces we don't own. But what happens when someone else's property injures you or someone you know?

A pair of silhouetted legs falling down a hole with yellow background

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot