Cooper Asset Litigation: 5 Reasons Default Judgment Is the Real Risk

If Cooper Asset Litigation has filed suit against your business, the real risk is not losing the case. It is losing it by default. Here’s the bottom line: If you are served with a complaint for unpaid debt and you fail to respond to the lawsuit, the law assumes that you agree with everything the complaint says. As a result, if you don’t respond to the complaint, the creditor can get a default judgment.

1. The clock is short

The deadline to answer a lawsuit is usually twenty days after you get served, but the laws vary from state to state. For instance, in federal courts it’s 21 days. In New York City Civil Court, the deadline to answer is twenty days if the complaint was handed to you in person, but you get thirty days if served another way. It’s important to check and make sure your deadline isn’t shorter.

Don’t assume that you can still work it out, as if nothing has happened, after the creditor has decided to take the time and effort to sue. The plaintiff already paid court costs, hired an attorney and had you served with legal papers. The time for bluffing has passed.

2. You lose your side

The deadline to answer is the deadline to fight. If you don’t respond, the court treats it as if you admitted everything claimed in the lawsuit, even if it is untrue. The court won’t listen to any of your claims or defenses; you may have had a winning defense that they never learned of.

The creditor can then get a default judgment against you for the entire amount claimed in the complaint, plus court costs. This means the court will order you to pay that amount. If the amount is not fixed, the court will hold a damages hearing. All the court will hear is the plaintiff’s side of the story.

3. Collection starts fast

After getting a judgment, the creditor’s attorney will try to collect the money. They usually put a lien on any real estate you own in that county and then may auction it off in a Sheriff’s sale. They can also ask you questions about your bank and brokerage accounts under oath and then garnish those accounts. In New York, after a restraining notice, the bank can freeze your bank account for up to twice the amount of the judgment. They can also seize assets such as your car or equipment or even your interest in your business.

4. It follows you

The judgment stays with you, and it doesn’t age like wine. A judgment in Pennsylvania is a lien for five years from entry. Judgments can be renewed repeatedly. Even if you move, the judgment can be entered in a different state. In New York, a judgment can accrue post-judgment interest at a rate of 9% per year.

A lien can limit or even prevent buying, selling, or refinancing any real estate. Lenders usually won’t issue a mortgage to someone with a default judgment. It can even show up on your credit report.

5. Undoing it costs more

Undoing a default judgment is harder than just answering in the first place. In Pennsylvania you generally must file a motion to open the judgment within ten days. For a motion to strike, a defect must appear on the face of the record. Also, there is no guarantee the court will let you off the hook. It can be costly to reopen a judgment.

In New York, to reopen a default judgment you generally need a legitimate excuse for not responding and a meritorious defense. It’s not automatic even if you have a really good reason for not responding. If there is a problem with how the lawsuit was served on you, this can allow you to undo a default judgment even if you can’t reopen it on the merits.

Contact an Attorney Right Away

Contact an attorney right away about how you should answer to a lawsuit filed against you. A lawyer knows the law and rules, and can respond with the right defenses. Before you call, find the complaint and the Summons. Even after a default, a lawyer might be able to help you work out a settlement. Don’t let a default judgment follow you for years.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.