A default judgment against you means a court has ruled in the plaintiff’s favor because you didn’t answer the lawsuit or appear in court, not because a judge decided the plaintiff was right on the facts. The plaintiff now has a legally enforceable order for whatever they asked for in their complaint, and they can use the court’s collection tools to get it. You may still be able to reopen the case, but the window is narrow and the standards are strict, so what you do in the next few weeks matters more than anything else.
What the Plaintiff Can Do to Collect Now
Once the judgment is entered, the plaintiff becomes a judgment creditor. That title comes with real power, and some of it can be used without warning you first.
Garnish Your Paycheck
The creditor can ask the court to order your employer to withhold part of your wages and send the money directly to them. For most consumer debts, federal law caps garnishment at 25% of your disposable earnings, or the amount by which your weekly earnings exceed 30 times the federal minimum wage, whichever produces the smaller garnishment.1Office of the Law Revision Counsel. 15 US Code 1673 – Restriction on Garnishment Disposable earnings are what’s left after legally required deductions like taxes and Social Security.
Some debts allow larger bites. Court-ordered child support or alimony can reach 50% of disposable earnings if you’re supporting another spouse or child, or 60% if you’re not, with an extra 5% available when payments are more than 12 weeks late. Federal agencies collecting non-tax debts owed to the government can garnish up to 15% without even going to court.2U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act
Federal law does forbid your employer from firing you because your wages are being garnished for a single debt.3Office of the Law Revision Counsel. 15 US Code 1674 – Restriction on Discharge from Employment by Reason of Garnishment That protection ends if a second garnishment order comes in.
Freeze Your Bank Account
The creditor can also get a court order directing your bank to freeze and hand over funds up to the full judgment amount. The bank has to comply, and this can happen with no advance notice, so you may find out only when a debit card is declined or a check bounces. Funds are typically held briefly before being released to the creditor, and that short window is your chance to claim any exemptions that apply.
Put a Lien on Your Property
A creditor can record a lien against your real estate. That lien attaches to the title, becomes public record, and generally prevents you from selling or refinancing until the debt is paid. If the debt stays unpaid long enough, the creditor may eventually try to force a sale, though that’s less common and depends heavily on state law and homestead protections.
What They Cannot Touch
Not everything you have is available to a judgment creditor. Federal law protects several income streams from garnishment and levy, and these protections survive the judgment.
Social Security retirement, disability, and Supplemental Security Income payments are broadly protected.4Office of the Law Revision Counsel. 42 US Code 407 – Assignment of Benefits So are Veterans Affairs benefits, Railroad Retirement benefits, and federal employee retirement payments. When these funds hit your bank account, federal regulations require the bank to automatically protect an amount equal to two months’ worth of benefit deposits before honoring any garnishment order.5eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments
State law adds more. Most states have homestead exemptions that shield some equity in your primary residence, ranging from as little as $5,000 in a few states to unlimited in Florida and Texas. Many states also protect a portion of wages, retirement accounts, unemployment insurance, and workers’ compensation beyond what federal law requires. Figuring out which exemptions apply where you live is one of the first practical steps to take.
The Debt Keeps Growing
A judgment isn’t a fixed number sitting in a file. Interest starts accruing the day it’s entered and keeps running until you pay. In federal court, the rate is tied to the weekly average one-year Treasury yield and compounds annually.6Office of the Law Revision Counsel. 28 US Code 1961 – Interest State rates are set by statute and vary widely, from around 2% in some states to 10% or more in others.
Judgments also last a long time. Depending on the state, one remains enforceable for 5 to 20 years, and in most states the creditor can renew it before it expires and restart the clock. A $10,000 judgment left alone for a decade can easily reach $15,000 or $20,000 once interest and collection costs are added. Trying to wait it out rarely works.
The Debtor’s Examination You Cannot Skip
After winning, the creditor can ask the court to order you to appear for a debtor’s examination. You answer questions under oath about your income, bank accounts, property, and other assets so the creditor knows where to aim.
This is not like the original lawsuit. Ignoring the complaint got you a default judgment; ignoring a debtor’s examination can get you held in contempt of court, because the examination is a court order, not a request. Failing to show up or refusing to answer honestly can bring fines or jail. You won’t be jailed for owing the debt itself, but you can be jailed for defying the court order to appear.
How to Vacate a Default Judgment
The case is not permanently closed. Courts allow defendants to ask that a default judgment be set aside, but you need a legally recognized reason and you need to move quickly.
Grounds That Actually Work
Disagreeing with the outcome is not enough. In federal court, motions to reopen a final default judgment fall under Rule 60(b), which requires specific grounds.7Legal Information Institute. Federal Rules of Civil Procedure Rule 60 – Relief from a Judgment or Order The most common ones:
- Improper service of process. You were never properly notified of the lawsuit. If the plaintiff didn’t follow the legal rules for delivering the summons and complaint, the court had no authority to act on your silence. This is the strongest ground because it goes to the court’s basic jurisdiction.
- Excusable neglect. You missed the deadline because of something outside your control, such as a serious medical emergency, a family crisis, or overseas deployment. Courts want proof, like hospital records or military orders.
- Fraud or misrepresentation. The plaintiff got the judgment through dishonest conduct, for example by falsely swearing they served you when they didn’t.
You Also Need a Real Defense
Even with a good reason for missing the deadline, most courts require you to show that reopening the case wouldn’t be pointless. You have to point to a legitimate defense to the underlying claim. You don’t have to prove you’d win, but you do have to show you’d have a real argument if the case moved forward.
Deadlines Are Tight
In federal court, motions based on mistake, excusable neglect, newly discovered evidence, or fraud must be filed within one year of the judgment.7Legal Information Institute. Federal Rules of Civil Procedure Rule 60 – Relief from a Judgment or Order Even inside that year, courts expect you to file within a “reasonable time” after learning about the judgment. Waiting six months when you could have acted in two weeks will hurt you. State courts set their own deadlines, and some are shorter than the federal one.
What Filing Looks Like
The document is usually called a Motion to Vacate Default Judgment. You file it with the same court that entered the judgment, include the case number, explain your legal grounds, and attach supporting evidence. Then you serve a copy on the plaintiff or their attorney. The court schedules a hearing, both sides argue, and a judge decides whether to reopen the case. Filing fees generally run from around $50 to a few hundred dollars.
If the motion is granted, the default judgment is erased and the case starts over from the answer stage. If it’s denied, you may be able to appeal, but appellate courts give the trial judge significant deference on these calls.
What About Your Credit Report
Since 2018, civil judgments no longer appear on consumer credit reports. The three major credit bureaus removed them as part of a settlement with state attorneys general over data accuracy concerns, and bankruptcies are now the only public record still reported.8Consumer Financial Protection Bureau. A New Retrospective on the Removal of Public Records That doesn’t make the judgment invisible. Lenders, landlords, and employers who run background checks can still find it in public court records, and the collection activity tied to the debt can create financial problems that show up in other ways.