If you don’t show up to court for a debt collection lawsuit, the judge will almost certainly enter a default judgment against you for the full amount the creditor claims, plus interest, court costs, and attorney fees. From that point forward, the creditor has legal tools to collect: garnishing your paycheck, freezing your bank account, and placing a lien on your home. You lose every defense you might have raised, including defenses you may not have known you had. The one piece of good news is that a default judgment can sometimes be undone if you move quickly.
The Default Judgment and What It Costs You
Most states give you 20 to 30 days after being served to file a written answer. Miss that deadline without appearing, and the creditor asks the court for a default judgment. The court grants it without hearing anything from you, typically awarding the full amount demanded plus interest, costs, and fees.
A default judgment erases every argument you might have made. Maybe the amount was inflated. Maybe the debt wasn’t yours. Maybe the statute of limitations had already run out. None of it reaches the judge, because you weren’t there to raise it.
Interest starts running on the judgment immediately. Post-judgment rates vary by state and generally fall somewhere between 4% and 12% per year. On a $10,000 judgment at 8%, that’s $800 added every year the balance stays unpaid. The debt grows while the creditor uses the collection methods below to chase it.
Wage Garnishment
One of the first moves a judgment creditor makes is a wage garnishment order sent to your employer. Your employer must withhold part of each paycheck and forward it to the creditor. You don’t get to opt out.
Federal law caps the amount. For ordinary consumer debts, a garnishment can take the lesser of 25% of your disposable earnings or the amount by which your weekly disposable pay exceeds 30 times the federal minimum wage. At the current $7.25 federal minimum, that threshold is $217.50 per week. Earn less than that after mandatory deductions and your wages can’t be garnished at all. If your state sets a lower cap, the state limit controls.
Your employer can’t fire you because of a garnishment for a single debt.1U.S. Department of Labor. Fact Sheet #30: Wage Garnishment Protections of the Consumer Credit Protection Act (CCPA) That protection falls away once a second garnishment arrives for a different debt, so multiple defaults can genuinely put your job at risk.
Social Security, Supplemental Security Income, veterans’ benefits, and federal retirement payments are generally protected from garnishment by private creditors.2Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits, Like Social Security or VA Payments?
Bank Account Levies
A creditor can also go straight for the money in your bank account. With a court order, the bank freezes the funds and eventually turns them over. A levy can empty your checking balance overnight, triggering overdrafts and bounced payments on whatever bills were set to clear.
One federal rule protects you automatically. When your bank receives a garnishment order, it must look back two months for federal benefit deposits made by direct deposit, calculate that amount, and leave it available to you without freezing it. You don’t have to file paperwork for this to happen.3eCFR. Part 212 Garnishment of Accounts Containing Federal Benefit Payments
Anything beyond that protected amount can be frozen. You’ll usually receive notice and have a short window to file a claim of exemption with the court for other funds protected under federal or state law.2Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits, Like Social Security or VA Payments? Speed matters. Once the money is released to the creditor, clawing it back is much harder.
A practical pointer: keep exempt income separate. When Social Security or similar funds sit in the same account as other money, tracing which dollars came from a protected source gets complicated, and you can lose the exemption on money you were entitled to keep.
Property Liens
A judgment creditor can record a lien against real property you own, usually your home. The lien attaches to the title and blocks you from selling or refinancing without paying off the debt first. The creditor doesn’t need you to sign anything. Recording the judgment with the local government is enough.
A lien doesn’t force a sale, but it clouds the title for a long time. Judgment liens last anywhere from 5 to 20 years depending on the state, and most states let creditors renew them before expiration. Some allow multiple renewals, keeping a lien in place for decades.
Many states offer homestead exemptions that shelter some or all of the equity in a primary residence. Protected amounts vary widely, from modest sums in some states to unlimited protection in a few. Some states apply the exemption automatically; others require you to file a declaration. If you own a home and a judgment is coming at you, finding out exactly how your state’s homestead exemption works is time well spent.
Can You Be Arrested?
No one can be arrested for owing a debt. Any collector who threatens you with arrest over an unpaid bill is violating the Fair Debt Collection Practices Act.4Consumer Financial Protection Bureau. Can I Be Arrested for an Unpaid Debt?
There is one scenario, though, that catches people off guard. After winning a judgment, a creditor can ask the court to order you to appear for a debtor’s examination, a formal hearing where you answer questions under oath about your income, accounts, and property. If you ignore that court order, the judge can hold you in contempt and issue a bench warrant. The warrant isn’t for the debt. It’s for defying the court. The legal distinction doesn’t help much when law enforcement shows up.4Consumer Financial Protection Bureau. Can I Be Arrested for an Unpaid Debt? Lying during the exam carries its own risk, since your answers are given under penalty of perjury.
The Defenses You Just Lost
Skipping court is especially painful because it costs you defenses you may not have known you had. The biggest is the statute of limitations. Every state sets a window during which a creditor can legally sue on a consumer debt, usually three to six years.5Consumer Financial Protection Bureau. Can Debt Collectors Collect a Debt That’s Several Years Old?
If the window has closed before the creditor sues, you have a complete defense. But only if you show up and raise it. Courts don’t check the statute of limitations on their own. If you don’t appear, you get a default judgment even on a time-barred debt.5Consumer Financial Protection Bureau. Can Debt Collectors Collect a Debt That’s Several Years Old? Suing on an expired debt may itself violate the FDCPA, but that claim goes nowhere if you aren’t in the courtroom to make it.
Other defenses that die with your absence include wrong amount, wrong person, identity theft, prior bankruptcy discharge, and payment already made.
How Long the Judgment Can Haunt You
Judgments stick around. Enforcement periods run anywhere from 5 to 20 years depending on the state, and most states let creditors renew before expiration. Many allow repeat renewals, so a determined creditor can keep a judgment alive for decades.
Through that entire period, the creditor can keep pursuing garnishment, levies, liens, and debtor’s exams. Post-judgment interest never stops accruing. A $5,000 judgment can easily double over a decade once interest and collection costs pile on. Waiting it out rarely works when the creditor is active.
How to Vacate a Default Judgment
A default judgment isn’t necessarily permanent. If you file a motion to vacate and show valid grounds, the court can reverse it. For anyone who has already missed a court date, this is the step that matters most.
Common grounds include:
- Improper service. You were never properly served with the lawsuit. If the papers went to the wrong address or the server falsely claimed personal delivery, the court lacked jurisdiction over you. Most states don’t impose a time limit for raising this.
- Excusable neglect. A legitimate reason kept you from responding, such as serious illness, a family emergency, military deployment, or genuine confusion about the date. The deadline is typically one year from the judgment.
- Fraud or misrepresentation. The creditor misled the court about the debt amount, your identity, or other material facts.
- Void judgment. The court lacked jurisdiction, for example because you were sued in the wrong state.
Under the federal rules, motions based on excusable neglect, new evidence, or fraud must be filed within one year of the judgment. Motions based on a void judgment or other extraordinary circumstances have no fixed deadline but must be brought within a “reasonable time.”6Legal Information Institute (LII) / Cornell Law School. Rule 60 Relief From a Judgment or Order State rules follow similar lines, with varying specifics.
Courts generally want to see two things: a good reason you missed court, and a legitimate defense to the underlying debt. Qualifying defenses include proof of payment, a disputed amount, the statute of limitations, identity theft, or a prior bankruptcy discharge. Filing fees for the motion are usually modest, often $35 to $60, and fee waivers are commonly available.
When You Have Nothing to Take
Even with a judgment, a creditor can only collect from income and assets that aren’t legally protected. If almost everything you have is exempt, you’re what’s called judgment proof. The creditor wins on paper and collects nothing in practice.
This generally fits people whose only income comes from exempt sources such as Social Security, disability benefits, or public assistance, who don’t own significant assets like a home with equity, and whose financial situation isn’t likely to change. Creditors recognize dead ends, and many back off a judgment-proof debtor.
Being judgment proof doesn’t erase the judgment. If your circumstances improve during the enforcement period, the creditor can come back. But while the well is dry, active collection usually stops.