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Long Island Default Judgment

If you fail to pay a creditor on time, the creditor has several options to try to get you to pay the debt. Eventually the creditor may file a lawsuit against you in civil court for the amount of the outstanding debt plus fees. If you fail to respond to the lawsuit, the court will likely issue a default judgment in favor of the creditor. A default judgment will entitle the creditor to get everything that the creditor asked for in the lawsuit. However, even if you cannot afford to make your monthly payments, there are options to consider so that your creditor will not go to the extreme step of seeking a judgment against you. For example, you could enter into a debt settlement agreement with each of your creditors, you could pay off your debt through debt consolidation, or you could file for chapter 7 or chapter 13 bankruptcy. If a default judgment has been entered against you, it is critical that you immediately contact an experienced Long Island Default Judgment Lawyer who will review the specifics of your financial situation and explain your options for getting the default judgment reversed as well as your options for managing your debt.

Default judgment process

Under New York law if a creditor such as a credit card company decides to bring a lawsuit against you in order to collect the money you owe, there is a process that the creditor must follow. A creditor must first let you know in advance of the intention to take you to court. The creditor must serve the papers regarding the lawsuit to you at your home. The papers will include a summons and a complaint that will let you know details of the lawsuit, including the name of the creditor, the amount of money the creditor is seeking from you, and the date, time and place where a hearing will held regarding the lawsuit.

In some instances the creditor may properly serve the papers to the person owing the debt, but that person fails to appear in court at the designated time to defend against the lawsuit. If this occurs, the court will likely issue a default judgment. However, it is also common for a creditor to fail to properly serve you. For example, the process server may report that he or she handed the documents to you at your home as required by law, but in reality that never happened. If you were not properly served and as a result did not appear in court on the designated date to respond to the lawsuit the judge may end up issuing a default judgment.

Consequences of a default judgment

If a default judgment has been entered against you, that means that your creditor filed a lawsuit against you and you were found liable. The judgment will be appear on your credit report, negatively impacting your credit worthiness. In addition, with a default judgment the creditor will be able to collect on the judgment through a wage garnishment. This means that the creditor can require your employer to send a portion of each of your paychecks directly to the creditor until the amount of the judgment is satisfied.

There are, however, limits on the amount of your paycheck that the creditor can seize. A creditor cannot seize your entire paycheck, leaving you with no money to purchase food and pay for other life necessities. According to New York Civil Practice Law and Procedure section 5231, a creditor can only take the lesser of 10% of your gross wages or 25% of your disposable income to the extent that such amount exceeds 30% of minimum wage. "Disposable earnings" are defined as the money that left over in your paycheck after your employer has made deductions required by law such as federal, state and local taxes, and social security.

A default judgment is serious. As a result your creditor will have the legal authority to take aggressive actions to collect the debt, such as having your wages garnished. However, there are ways that you can fight a default judgment. The staff at Stephen Bilkis & Associates, PLLC has extensive experience helping clients avoid garnishments, eliminate debt and deal with other issues related to debt relief. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your debt issues.