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This article explains how a creditor can get a default judgment against you, and what you can do to have it set aside.
If a creditor sues you to try to collect a debt, it will start by filing a complaint. You have 21 or 28 days (depending on how it was served) to respond to the complaint by filing an answer. Read Going to Court to Defend a Debt Collection Case to learn about what to expect in a debt collection case. If you don’t answer a complaint within the time limit, your creditor can ask the court to find you in default. A creditor can also ask the court to find you in default if you don’t do something the court orders you to do like going to court for a hearing, answering a discovery subpoena, or making court ordered payments.
There are two steps to getting a default judgment. First, a default must be entered. Then, a default judgment is entered.
Default
A default is entered one of two ways. In some courts, the court clerk enters a default if the defendant doesn’t answer or respond to a complaint by the deadline. In other courts, the creditor must ask the clerk to enter a default. The creditor does this by filing a Request for an Entry of Default and Affidavit with the court.
The request and affidavit says:
- There is a claim against you;
- You were properly served with a summons and complaint; and
- You are 18 or older old and competent.
The affidavit must also say you are not on active military duty as far as the creditor knows. A default can’t be entered against a person on active military duty.
If the case is in a district court, the clerk of the court is required to send the notice of default to the parties (you and your creditor). If the case is in any other court, the creditor must send the notice to you and file a Proof of Service with the court. The Proof of Service states that all the parties to the case were sent notice of the default.
Default Judgment
Your creditor can request a default judgment anytime after a default is entered. A default judgment is a final order from a judge. Getting a judgment against you lets the creditor start collecting the debt by garnishing your bank account or paycheck, seizing property, or filing judgment liens. The court clerk must mail a notice that a default judgment has been entered to all the parties in the case.
Sum Certain
A creditor can get a default judgment without a hearing if it knows exactly how much you owe or can easily figure it out. This is a default judgment for a “sum certain.” Debt collection cases often involve sum certain judgments.
Sum not so certain
If the creditor doesn’t know the exact amount you owe or have a formula to easily figure it out, the court must have a hearing to figure out how much money you owe before it can enter a default judgment.
Getting a Default Set Aside
After the court enters a default or a default judgment against you, you can’t take any action in a case until you have it set aside.
You can ask the court to set aside your default or default judgment by filing a Motion and Affidavit to Set Aside Default. You can use the Do-It-Yourself Motion to Set Aside Default (Consumer Debt) tool to prepare your motion.
Before a court can set aside a default or default judgment, it must find:
- You have good cause for failing to answer or appear;
- You have a good (meritorious) defense to your creditor’s case.
Good Cause
The first thing you have to show is good cause. To get a default set aside you must have good cause for not answering or going to court. Good cause is a reason you didn’t respond to the suit or do what you were supposed to do. Good cause can be:
- A substantial defect or irregularity in the proceedings the default was based on
- A reasonable excuse for not meeting the requirements that led to the default
Substantial Defect
A “substantial defect or irregularity in the proceedings the default was based on” means there was a serious problem or mistake in the way the case or the default was handled and, as a result, you didn’t know about the complaint or the default. There’s substantial defect when:
- The creditor doesn’t give you notice of the entry of default;
- You don’t get notice that a default judgment was going to be entered;
- You were improperly served with the court papers that you didn’t answer (most often the complaint).
For example, if the default or summons and complaint were served by leaving them with your young child who forgets to give them to you, there may be a substantial defect. But, if your young child does remember to give the summons and complaint to you, there’s no substantial defect, because you do actually know about the summons and complaint.
Reasonable Excuse
Do you have a good reason for not responding to the complaint or missing the hearing that led to the default? If, for example, you were in the hospital on the day of your hearing and the court found you in default for not showing up, you probably have a reasonable excuse. Keep in mind that the judge will want to see some proof, like a doctor’s note, to support your excuse.
If you offer an excuse that is not reasonable, you may irritate the court for wasting its time, so think carefully before you file a motion based on an excuse.
Meritorious Defense
The second thing you have to show is your meritorious defense. To have a default set aside, you need to tell the court why you should have your day in court; that is, you have a defense (a reason your creditor should not win).
Some common defenses in collection cases are:
- The creditor didn’t state that you owe the money in the complaint;
- You paid part or some of the money your creditor says you owe;
- You have declared bankruptcy that discharged this debt;
- The plaintiff waited too long to bring this case;
- You shouldn’t have to pay this debt because it was the result of stolen identity;
- The debt is based on an agreement that wasn’t fair or took advantage of you.
You must file an Affidavit of Meritorious Defense. This is a sworn statement based on your personal knowledge that tells the court the facts underlying your defense. If you’re using our Do-It-Yourself Motion to Set Aside Default (Consumer Debt) tool to complete your motion, creating the affidavit is part of the process.
Timelines for Requesting a Default or Judgment Be Set Aside
A default can be set aside any time before a default judgment is entered.
You have 21 days from when the default judgment was entered to request it be set aside so you can defend the case. If you were not personally served with the summons and complaint and did not learn about the case until after the default judgment was entered, the 21-day limit does not apply.
If you did not get notice that a default judgment was entered, and it’s been more than 21 days since it was entered, you may be able to request relief from it using a Motion for Relief from Judgment. If you seek relief from a judgment, you must prove you have good cause and a meritorious defense to get the default judgment set aside. There is no simple form you can use to ask for relief from a judgment. You may want to talk to a lawyer about this.
If you have low income, you may qualify for free legal services. Whether you have a low income or not, you can use the Guide to Legal Help to find lawyers in your area. If you are not able to get free legal services but can’t afford high legal fees, consider hiring a lawyer for part of your case instead of the whole thing. This is called limited scope representation. To learn more, read Limited Scope Representation (LSR): A More Affordable Way to Hire a Lawyer. To find a limited scope lawyer, follow this link to the State Bar of Michigan lawyer directory. This link lists lawyers who offer limited scope representation. You can narrow the results to lawyers in your area by typing in your county, city, or zip code at the top of the page. You can also narrow the results by topic by entering the kind of lawyer you need (divorce, estate, etc.) at the top of the page.
Filing Your Motion
You can complete the motion using our Do-It-Yourself Motion to Set Aside Default (Consumer Debt) tool. After you complete the motion, you need to file it in the court and serve it on your creditor. When you file the motion, you will also need to schedule a hearing for it. See the instructions for filing your motion in Setting Aside a Default or Default Judgment in a Debt Collection Case to learn how to file the motion, serve it and schedule a hearing on it.
Going to Court
At the hearing, each side has a chance to tell the judge its side of the story. Since it’s your motion, you go first. Tell the judge why the default should be set aside, and answer the judge's questions as completely as possible. Then your creditor (or your creditor’s attorney) will get to tell the judge why the default should not be set aside. It is very important to follow the rules and not interrupt the other side during its turn.
After both of you tell the judge your side, and answer any questions the judge has, the judge will probably make a decision. The judge might rule on the motion later in writing.
If the Default Is Set Aside
If your reasons for setting the default aside are better than your creditor’s reasons that it shouldn’t be set aside, the judge will grant your motion and set the default aside. This means you can then file an answer and your defense, and the case will proceed from there. To learn about this please see I have been Sued in a Debt Collection Case.
If the Default Is Not Set Aside
If your reasons are not good enough, or your creditor’s reasons are better, the judge may decide not to grant your motion.
If your motion is not granted or you didn’t meet the requirements to file the motion, you can ask the court to let you pay the judgment in installments. To learn about this please see Requesting an Installment payment Plan to Pay a Judgment.
You can also contact your creditor and see if it’s willing to work out a payment plan outside of court or accept a lump sum settlement for less than the amount due. Make sure you get any agreements with your creditor in writing.
Once a default judgment – or any judgment – is entered in the case, your creditor can take action to collect on it. For example, a creditor can garnish your bank account or paycheck, seize property, or file judgment liens against you. To learn about garnishments, see I'm Being Garnished for a Debt That Is Not Child Support. To learn about property seizures and judgment liens, read Seizure of Personal and Real Property to Pay a Debt.