Debt Collection Default Judgments in Georgia

Default Judgments 

A default judgment is what a plaintiff can get when a defendant is validly served with the lawsuit under the law, but fails to timely file an answer.   An answer to the lawsuit must be filed within 30 days of service  (there is one exception to this:  when a lawsuit is filed and discovery is served upon the defendant, the defendant then has 45 days from the service of the lawsuit to file an answer.  If you don’t know what this means, be safe and file an answer within the 30 day period from the date of service).   The moment you are served with the lawsuit, the clock starts ticking.   Filing an answer requires you to respond to the Plaintiff’s lawsuit in writing and file your response with the clerk of court in the county in which the lawsuit is filed.   Even after the 30 days period has run, there is a period of 15 days  after that in which you can still save yourself from a default judgment.  A defendant who fails to answer the lawsuit can “open” default by filing an answer and paying costs of court no later than the 45th day after being served.  After that, it will be up to the court to determine whether or not the defendant can fight the lawsuit at all.

Many debt collectors and debt buyers are extremely successful precisely because the people they sue fail to file any answer whatsoever.  It may be because they don’t know what to do, don’t have the money to hire a lawyer or settle the case, or are perhaps just overwhelmed by the idea of what might happen if they go to court.   By doing nothing, they ensure that the other side has the upper hand from that point on.  It is of the utmost importance that the defendant file some answer to the lawsuit, even if it is just to say that “I do not owe the plaintiff any money.”  This will be enough to preserve the issues for trial so that the defendant can take the time necessary to hire an attorney or, at the very least, educate himself or herself as to how to defend the case as best he or she can.

In the event of a default that goes beyond the 45 days mentioned above, there are only three reasons that the Court can permit the defendant to open default and get the case back to where it needs to be.  These are providential cause, excusable neglect, and proper case.  The Court has wide discretion to determine whether or not a default should be opened, but a defendant takes his chances from jurisdiction to jurisdiction and even from judge to judge.  I have had cases in which both I and my opposing counsel agree that things would have turned out differently but for the judge who was hearing the case.  The same could be said of almost any legal issue, but it seems quite obvious in this particular instance.

As a rule, the law does not favor default.  The law, and presumably the Courts, are to prefer that all cases be litigated and decided on their legal and factual merits.  The fact that one party has failed to adhere to the time restrictions and procedural requirements of the law do demand that some guidelines and repercussions exist for fairness.  However, when practical and possible, the courts are supposed to err on the side of allowing parties to litigate on the merits.  Unfortunately, this is a call that is made by a judge and can go either way.

The lesson here for the defendant who has been served  with a lawsuit is always file a timely answer.  Do not give this kind of leverage to your opponent.  Fear and intimidation can cost you dearly.  You must be vigilant and be your own best advocate.

I recently had a case in which my client was being sued by a third party debt buyer for $15,000 or so.  My client had little money to hire an attorney and actually consulted with a bankruptcy attorney.  Before she knew it, the thirty day mark was upon her and she did not file an answer.  She kept telling herself she was saving to hire an attorney.  Note that saving to hire an attorney is not one of the three justifiable reasons for opening a default that I spoke of earlier.

By the time my client did contact and hire me, I was filing a motion to open default, along with all her defenses and counterclaims, and it was 78 days past the 30 day point.  The plaintiff debt buyer had not even moved for a default judgment, but the case was simply in default.  We went to a hearing on the matter, at which time I argued that my client had many defenses that went to the merits of the case, that the plaintiff had suffered no prejudice by my client’s failure to timely answer, and that due to her inexperience with the case and financial difficulties, this was a “proper case” under the law.

The judge drilled me for 35 minutes as to my arguments.  He believed that the plaintiff would suffer prejudice if he opened default because they would have to defend against my counterclaims.  I countered that he could open the default only for the limited purposes of allowing the defenses at trial and not the counterclaims, but he shut me down instantaneously.

“Just what makes this a proper case, Mr. DeWoskin,” he asked.   I gave him the best answer I could give.  I pointed out that the default calendar he had just read consisted of about 80 or 90 cases.  I showed him that there were about 12 defendants in the room who took the time to come to court to challenge the entry of defaults in their cases.  My client was one of those 12.  She had now incurred the cost of hiring qualified counsel, come to court in person, and stood there prepared to argue her case on the merits.  The judge shrugged off my arguments rather easily, and moved on with his challenges to my position.

I was next pressed as to why 78 days past the deadline set by law was reasonable.  I told him that there was very little guidance under the law and caselaw as to just how many days past the deadline are reasonable.  “If it was only 5 days, Your Honor, there is nothing under the law to say that this would be reasonable.  I suppose the best argument I can make is that it was not 110 days.”  I elaborated by going back to my first position and showing that there was no prejudice, the plaintiff had not filed any motions for a default judgment, and that no such judgment had yet been entered.  By this point, you can clearly see why I find arguing against default so frustrating as an attorney, especially when my clients have such strong defenses.

This case ended when the plaintiff asked to have the case continued so that we could discuss settlement.  The case did ultimately settle, but not nearly on the terms that would most have favored my client had she just filed a simple answer denying the plaintiff’s claims.