Oquity Litigation: 5 Reasons Default Judgment Is the Real Risk

When someone like Oquity sues a business, the usual reaction is to assume they are lying. Or to put off the dispute assuming there is time to work things out later (often a mistake). But the lawsuit itself is often not the problem. What the lawsuit can turn into, if you never answer it, is a default judgment.

1. Silence admits everything

Be aware that if you do not answer Oquity’s lawsuit, that is an admission of everything stated in the lawsuit. In other words, it does not matter how egregious Oquity’s lawsuit is, if you do not answer it, you cannot present any defense to the dispute whatsoever.

In a New York case, if the amount Oquity claims is a set dollar amount, you could face a judgment without a judge even hearing your side. The clerk, not a judge, can enter the judgment. That judgment is in the amount demanded by the plaintiff, with costs added on, and interest. And Oquity has up to one year after your default to demand it. When the amount is not fixed in the lawsuit, the court holds a separate hearing to assess the damages. If you do not appear at this hearing, it is likely that whatever damages the plaintiff proves will be assessed against you, without a defense.

2. The clock is short

To avoid these adverse outcomes, do not delay. Your deadline for answering Oquity is most often 20 days, but sometimes more. That deadline to answer is carefully calculated. Oquity has hired a lawyer, paid the court to file a lawsuit, and had a process server track you down. Maybe Oquity is bluffing, but the time to gamble about that is over. If you think a chat with Oquity will make it go away, that is dangerous wishful thinking.

New York makes matters complicated. If an Oquity representative handed the papers to you in New York, the deadline is 20 days. If they left it with someone else, or nailed it to your door, the deadline is thirty days after service is complete. Also a corporation must, apart from limited exceptions such as small claims, appear in court with an attorney.

3. Collection starts almost immediately

If Oquity sues you and obtains a judgment against you, Oquity can immediately begin to collect that judgment. Collection avenues open include seizing bank accounts, garnishing wages and liens on your real estate. In New York, a judgment creditor can hold your bank account hostage for up to a year. Oquity does not need to get a court order to restrain funds in a bank account. The judgment creditor can “double dip” by restraining up to twice the value of the judgment.

A default also opens you to a blitz of information requests. The plaintiff may send sworn questions to you, to banks, to PayPal, to Venmo, and to anyone who owes you. The sheriff may seize your personal property. That includes vehicles, office contents, and even your interest in a company you own.

A personal guarantee is a danger. If there is a contract debt with a personal guarantee, extra copies of the summons must be mailed to the defendant’s home address, at least twenty days before a default judgment. After judgment, for an income execution, under most conditions the limit is up to ten percent of the judgment debtor’s gross income.

4. The judgment keeps growing

A New York judgment grows automatically at an interest rate set by the law. Under most conditions, New York interest rates on judgments are nine percent. When Oquity sues and wins the judgment, interest continues to accrue on the debt, even if years go by without any payments. If it is twenty or more years since the entry of judgment in New York, the presumption is that the judgment has been paid. But the clock restarts if you make a payment on the judgment, or acknowledge it in writing. All the while, that old debt may appear on credit reports. Banks and title companies may refuse to refinance with the lien in place.

5. Undoing it is harder

There can be legal fees and extra process to undo it. You have to file a motion. To vacate a default in New York you must prove two legal factors. The first is a reasonable excuse for the default. The second is a potentially meritorious defense. The court may not overturn the judgment if you lack reasonable excuse, even if you have a good defense.

If Oquity properly serves notice of entry of judgment, you are limited to one year in which to ask to vacate the judgment. The decision is with the judge. All of this time and effort could have been avoided, with simply an answer to the original lawsuit.

Once Oquity serves you, hire a lawyer, even if before this you were not taking the lawsuit seriously. Note your deadline to answer and schedule it where you will see it. Gather all the lawsuit papers, your contract, emails and bank records. Even after a default judgment against you, you can sometimes still negotiate a settlement or payment plan.

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.