What Is a Default Judgement and How Does It Affect You?

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Written by James Case

Every decision a court makes is called a judgement. Once a court judgement has been made, it can be enforced for non-compliance.

A default judgement occurs when a court makes a judgement against the defendant (in this case, you) without a court hearing. A default judgement can be made against you because:

  1. You failed to file a response to the originating court summons within the required time frame. This is usually 14 days.
  2. You didn’t lodge a defence to the claim filed against you within the required time frame.
  3. You failed to attend the pre-trial conference/listing conference.

Once the default judgement has been made against you, you become a judgement debtor. This means you owe the plaintiff (the other party) money.

What are the consequences of having a default judgement entered against you?

If a default judgement is entered against you, it can have some devastating financial consequences. It can affect your credit rating and future borrowing ability, even if you later pay the judgement debt in full.

If you fail to comply with the default judgement, it can be enforced against you in numerous ways. Some common enforcements include:

  • Property Seizures and Sales Order: This is the forcing of the sale of your property to cover the judgement sum
  • Debt Appropriation Order: This relates to the court ordering your employer to pay the money owed directly to the plaintiff until the full amount is paid.

This is why it is very important that if you are served with court documents that you quickly take steps to make sure enforcements are not used against you. Read the court documents very carefully and make a note of any deadlines you are required to meet. Failing to meet these obligations can be very detrimental and very costly to resolve.

Setting aside a default judgement

In certain circumstances, you can apply to have a default judgement set aside. However, claiming that you “didn’t know about the time restraints” or that you “were busy” are not sufficient reasons to have the default judgement set aside.

There are two ways to have the default judgement against you set aside. This is can either be by consent of the parties or via an application to the court.

Consent of the Parties

When the plaintiff consents to having the default judgement against you set aside, it is known as the consent of the parties. However, it is unlikely that a plaintiff will consent to this happening.

Nevertheless, if you reach a settlement agreement with the plaintiff and you need to borrow funds from a financial institution to meet the settlement agreement, the plaintiff may be more likely to agree with having the default judgement against you set aside.

Since a default judgement affects your credit rating, it may prevent you from raising the necessary funds to reach a proposed settlement. However, the plaintiff may agree to have the default judgement set aside so you can raise the required sum. When this happens, it is likely that the plaintiff will find an alternative form of security such as a Caveat over your property.

Application to the court

In some cases, the court can agree to set aside the default judgement against you. Once again, excuses such as “I didn’t know about the time restraints” and “I was busy” are not sufficient excuses to have the judgement set aside.

You will need to demonstrate to the court:

  • A good reason why you were unable to perform your court procedure obligations and
  • You have a genuine defence to the claim

If the court is satisfied that you have met the above criteria, they may order the default judgement against you be set aside. They will also provide a time extension for the filing of a response, defence, or pre-trial conference hearing.

 

If you’re looking for advice about a claim, a judgement enforcement, or if you are looking to have a default judgement against you set aside, we suggest getting the help of a qualified, experienced, legal professional.

Our lawyers at Mountains Lawyers can advise you on your best courses of action and break down the necessary procedures into simple and understandable steps.

Let us help take some of that stress away. Give us a call today at 9592 7326 or contact us to a book consultation with one of our solicitors.

 

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