A default judgment means a court has ruled against you without a trial because you didn’t respond to the lawsuit on time. The court treats your silence as agreement with everything the plaintiff claimed, and the plaintiff walks away with a judgment they can enforce by garnishing your wages, freezing your bank accounts, and placing liens on your property. In federal court, the deadline to respond is 21 days after you’re served; state deadlines usually fall between 20 and 30 days.1Legal Information Institute. Federal Rules of Civil Procedure Rule 12 – Defenses and Objections: When and How Presented
How a Default Judgment Gets Entered
A lawsuit begins when the plaintiff files a complaint. You then receive that complaint along with a summons, which is a formal notice spelling out your response deadline and warning that failing to answer will result in judgment against you.2United States Courts. AO 440 Summons in a Civil Action
If the deadline passes with no response, the plaintiff asks the court clerk to record an entry of default. Then the plaintiff asks for the actual judgment. When the plaintiff is seeking a specific dollar amount that can be calculated from the face of the complaint, the clerk can enter judgment with no judge involved. Otherwise a judge reviews the case and may hold a hearing on damages.3Legal Information Institute. Federal Rules of Civil Procedure Rule 55 – Default; Default Judgment
One thing worth understanding: your failure to respond is treated as an admission of the facts the plaintiff alleged, but when the damages aren’t a fixed number, the court still decides what those facts are worth. The plaintiff doesn’t automatically get whatever figure they wrote down.
What a Judgment Creditor Can Do to Collect
Once the judgment is entered, the plaintiff becomes a “judgment creditor” with legal tools that work through your employer, your bank, and public records. You don’t have to cooperate for any of this to happen.
Garnishing Your Wages
A judgment creditor can get a court order telling your employer to withhold part of each paycheck.4Consumer Financial Protection Bureau. Can a Debt Collector Take or Garnish My Wages or Benefits Federal law caps the garnishment at the lesser of 25% of your disposable earnings for the week, or the amount by which those earnings exceed 30 times the federal minimum wage.5Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment Some states set lower caps. Garnishment continues until the judgment, interest, and collection costs are fully paid.
Freezing Your Bank Accounts
A creditor can also obtain an order freezing your bank accounts and taking the funds.4Consumer Financial Protection Bureau. Can a Debt Collector Take or Garnish My Wages or Benefits Certain funds are protected. When a bank gets a garnishment order, it must check for federal benefit deposits made in the prior two months, including Social Security, Supplemental Security Income, veterans’ benefits, and federal emergency disaster assistance, and keep an amount equal to those deposits accessible to you before freezing anything else.6eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments
Liens on Your Property
The creditor can record a lien against your real estate. The lien goes into the public record and effectively blocks you from selling or refinancing without first paying off the judgment. In some jurisdictions the creditor can eventually force a sale, though state homestead exemptions shield a portion of your equity. Protected equity varies widely, from around $50,000 in some states to unlimited protection in others.
Interest and How Long the Judgment Follows You
A default judgment doesn’t sit still at the original dollar amount. Interest starts accruing the day it’s entered. In federal court, the rate is tied to the weekly average one-year Treasury yield for the week before judgment, and it compounds annually.7United States Courts. 28 USC 1961 – Post Judgment Interest Rates8Office of the Law Revision Counsel. 28 USC 1961 – Interest State rates typically run from about 2% to 10% per year.
And the judgment lasts. Most states keep judgments enforceable for 10 to 20 years, and the majority let creditors renew them before they expire, sometimes indefinitely. A creditor who files on time can keep a judgment alive for decades while the interest keeps running. Hoping it will quietly go away is one of the most expensive mistakes you can make.
What It Does to Your Credit and Taxes
Since 2017, the three major credit bureaus no longer include civil judgments on credit reports, so a default judgment won’t directly lower your credit score. But it’s still a public court record anyone can look up, and the collection actions it enables will absolutely show up in your financial life. Garnished wages shrink your take-home pay. Levied accounts disrupt your bill-paying. Liens block real estate transactions.
There’s a tax piece most people miss. If a judgment debt is later settled for less than the full amount or canceled, the forgiven portion may count as taxable income. Creditors who cancel $600 or more of debt are required to file a Form 1099-C reporting the cancellation to the IRS.9Internal Revenue Service. About Form 1099-C, Cancellation of Debt Exceptions exist for insolvent debtors, but if you’re negotiating a settlement, plan for the possible tax bill.
Can You Undo a Default Judgment?
Sometimes. You can ask the court to cancel the judgment by filing a motion to set it aside. Judges take these motions seriously but don’t grant them just because you showed up late and want another shot. You need a valid legal reason for missing the deadline and, usually, a real defense to the underlying claim.
Grounds for Setting the Judgment Aside
The strongest ground is that the judgment is void because you were never properly served. If you can show no one delivered the summons and complaint, or that service didn’t follow the rules, the court lacked authority over you and the judgment has no legal force. A void judgment is treated as if it never happened.
The more common argument is “excusable neglect,” meaning you had a legitimate reason for missing the deadline. Serious illness, a family emergency, or being deployed overseas can qualify. Forgetfulness or being busy does not. You have to show the failure wasn’t intentional and that you acted promptly once you learned about the judgment.10Legal Information Institute. Federal Rules of Civil Procedure Rule 60 – Relief from a Judgment or Order
You Also Need a Real Defense
Most courts require you to show a meritorious defense to the underlying lawsuit on top of explaining the missed deadline. Judges won’t vacate a judgment just to watch you lose on the merits a few months later. You don’t have to prove you’ll win, but you have to present enough facts to show a genuine dispute exists. This is where many motions fail: the defendant explains the missed deadline well but has nothing meaningful to say about why they don’t owe the money.
Void Versus Voidable
A void judgment comes from a fundamental due process failure, like never being served at all. A voidable judgment has a procedural defect that makes it unfair but doesn’t strip the court of authority. For example, if the plaintiff served your lawyer when personal service on you was required, the error makes the judgment voidable rather than void. Voidable judgments stay enforceable until a judge vacates them; void judgments are legally meaningless from the start.
Deadlines to Act
The clock is the single most important thing to understand. In federal court, a motion based on excusable neglect must be filed within one year of the judgment.10Legal Information Institute. Federal Rules of Civil Procedure Rule 60 – Relief from a Judgment or Order Motions arguing a judgment is void were traditionally thought to have no hard deadline, but as of January 2026 the Supreme Court held that even void-judgment motions must be filed within a “reasonable time.” Waiting years after you discover the judgment will likely be too late.
State deadlines vary significantly. Some give as little as 30 days, others six months or more. Miss the state deadline and the judgment usually stands no matter how strong your grounds would have been.
How to File a Motion to Set It Aside
The motion is a written request filed with the court that entered the judgment. The format varies, but every motion needs the case number, the date the judgment was entered, the names of the parties, and a clear statement of which legal ground you’re relying on.
Alongside the motion, file a sworn statement (a declaration or affidavit) laying out the facts. If the argument is improper service, explain how service failed and attach evidence. If the argument is excusable neglect, detail what happened and attach supporting documents like medical records or military orders. Bare assertions rarely persuade judges.
You also need to file a proposed answer to the original complaint. That’s the document you would have filed on time, and it shows the court what your defenses look like. It demonstrates you’re ready to litigate, not stall.
After filing, serve a copy of the motion on the plaintiff or their attorney. The court will set a hearing where both sides argue. The plaintiff will typically oppose, calling your excuse inadequate or your defense weak. The judge rules based on the papers and the hearing.
Collection Doesn’t Automatically Stop
Filing a motion to set aside does not automatically pause collection. In federal court, execution is automatically stayed for 30 days after the judgment is entered.11Legal Information Institute. Federal Rules of Civil Procedure Rule 62 – Stay of Proceedings to Enforce a Judgment After that, you may need to post a bond or ask the court for a specific order halting collection while the motion is pending. If collection is already underway when you file, request a stay of execution at the same time. Without one, the creditor can keep garnishing and levying while the judge decides.
Why Ignoring It Doesn’t Work
Keeping a low profile rarely saves a defendant from a default judgment. Creditors have legal tools to find your assets. The most direct is a debtor’s examination: a court order requiring you to appear and answer questions under oath about your income, accounts, and property. Lying is perjury.
Creditors can also serve subpoenas on banks and employers to pull account balances and wage information. Many states maintain databases of financial institution locations specifically to make serving process easier. Between public records, credit header data, and these discovery tools, hiding assets from a determined judgment creditor is far harder than most people assume. The better move, almost always, is to address the judgment before the collection machinery turns on.