When a collection lawsuit is filed against you, failure to file a written answer with the court can result in a default judgment. If that happens, what can you do about it?
Failing to file a timely answer to a lawsuit is a very bad thing. A default judgment is just as enforceable as a regular judgment. Legally, it is just like you went to trial and had a verdict entered against you. Fortunately, Alabama law does provide you with some help. Under the classic case of Kirtland v. Fort Morgan Authority Sewer Service, Inc., 524 So.2d 600 (Ala. 1988), the Alabama Supreme Court made it clear that the laws of our state have a strong policy favoring the resolution of cases on the merits, rather than by default. Under the rule in Kirtland, the courts are supposed to liberally entertain motions to avoid default judgments if they were entered in violation of due process or the rules of civil procedure.
As a practical matter, there are generally two reasons why default judgments get vacated: either the defendant was not properly served with the original lawsuit paperwork, or the defendant had a good reason for not answering in time, and moves the vacate the default judgment within 120 days of it being entered.
Rule 55 of the Alabama Rules of Civil Procedure governs default judgments, and states that a default can be vacated for any reason within 30 days of being entered. If you ask the court to vacate a default within 30 days of it being entered, then you usually have a very good chance of getting the judgment set aside and having your day in court.
The best way to get a judgment vacated is to be able to prove that you never received notice of the lawsuit in the first place. This is not easy, though. You can’t just stand in court and say you were never served: you have to present persuasive evidence contradicting the plaintiff’s proof of service. Before a default judgment can be entered against you, the plaintiff has to file a Service Return with the court. This document states when and how the plaintiff served you with notice of the lawsuit. For instance, if a sheriff’s deputy or private process server delivered the papers to your residence, then they will file a document with the court showing just that. If the Service Return states falsely that you were served personally, then you may need to prove that you were not living at that address at the time you were allegedly served. Or you may be able to show that they served the wrong person. Keep in mind, though, that they are allowed to leave the summons at your residence with any adult who lives there.
If you were served with the lawsuit summons, then your options are narrower. Rule 60 of the ARCP governs judgments generally, and allows a judgment – including a default judgment – to be vacated within 120 days of being entered if the defendant can show that the judgment was entered due to “excusable neglect.” This includes, for instance, where a consumer debtor hired a lawyer or debt settlement company who was supposed to handle the case, but failed to file an answer or appearance on time. It could also include a situation where a consumer defendant sent an answer directly to a collection law firm, but failed to file one with the court. The most important thing to remember about these sorts of motions to vacate default judgments is the 120 day rule. If the motion to vacate is not filed within 4 months of the entry of the default, then you lose, even if you had a good reason for not answering in time.
The trial judge has a lot of discretion and may require testimony as to why the default should be vacated, but in my experience, they usually try to give the honest defendant a chance to have their day in court.