Vista Point Services LLC Litigation: 5 Reasons Default Judgment Is the Real Risk

If Vista Point Services LLC files a lawsuit against you, the default judgment clock starts ticking from the day you are served. This lawsuit will not go away on its own. You should not ignore the lawsuit, but the real risk is not a judgment. It is a default judgment. Creditors do not always have to prove their cases to collect on them. A default judgment is the legal victory when the defendant fails to answer.

1. Silence decides the case

With a default judgment, a plaintiff gets everything asked for: every legal claim is true, every fact is admitted, every defense is rejected. And it’s all decided by the court without ever listening to your side. If you have a perfect defense, it makes no difference. Even if there is every chance in the world you would win the case if you went to court, you can still lose it if you don’t go to court. It is a collection tool, not a test of who should win.

2. The clock is short

In New York, the deadline is usually 20 days from the day it was handed to you. In a lawsuit against a corporation, the deadline is 30 days if the Summons was served by substituted service, or on a state official. The company must hire a lawyer to answer a lawsuit. It can’t answer the lawsuit itself, with a few lower-court exceptions. So if a summons comes to your business, hire an attorney.

3. A clerk can sign it

You don’t have to go to court to lose your case. In some cases a judge doesn’t even need to see your file. If the complaint demands a fixed dollar amount, the plaintiff files a request with the court clerk (again, not a judge), to enter a judgment for that amount plus costs and interest. The plaintiff must ask for the default judgment within one year of your default. After a year, a lawsuit will be dismissed as abandoned, unless the plaintiff demonstrates “sufficient cause” to excuse the delay. Once the Clerk has entered the default judgment, it is no different from any other judgment. In New York, interest in a business case runs at 9% a year, so the balance keeps growing. Once a judgment is entered, the lawsuit part is finished and the collection part begins.

4. Collection starts fast

With the judgment the plaintiff becomes a judgment creditor. In New York, a lawyer can send a notice of restraint to a bank or other third party without going to court and without the consent of the court. The restraint binds the third party to do nothing for one year after it is served, unless the judgment is paid or vacated. It is a powerful weapon.

A docketed judgment in New York automatically becomes a lien against any real estate you own. It lasts for 10 years. The lien is against real property in the county where the judgment is docketed. With the lien, it will be hard or impossible to sell, buy or refinance any real estate. Banks and other lenders are unlikely to give you a mortgage. A judgment may hurt your credit score. The plaintiff can attach bank accounts, and get into your PayPal, Venmo and other online payment systems. You cannot safely assume that because a judgment is old, it’s too late for the creditor to collect it. If your judgment is more than 20 years old, you are presumed to have paid it. If you made a payment or signed a written acknowledgment of the debt in that time, there is no presumption and the judgment creditor can enforce the judgment.

5. Undoing it costs more

Once you have a judgment against you, you are playing from behind. The judgment is valid until a judge says otherwise. You must apply to a court to vacate it. Vacating a default judgment is usually done in one of two ways. The best known one is a motion for excusable default. The time limit is one year after the defendant was served with the judgment, with notice of entry. A defendant not personally served or notified gets more time: he has a year after learning about the judgment, but it cannot be vacated more than five years after it was entered. You also need a meritorious defense. Improper service of the Summons is a defense for a motion to strike the default judgment, but not an automatic winner. The court will not always vacate the judgment, and fighting it costs more than a timely answer would have.

When a default judgment is vacated, you are free to answer the lawsuit, and the case goes on as though it had been answered in the first place. Just because a judgment is vacated, it doesn’t mean the case is over. It doesn’t mean you win.

That’s why you should act at once. Write down the date you were served, find your copies of contracts, letters and other documents, and call your lawyer. Even after judgment, a settlement or payment plan may still be negotiable. Once a judgment is paid or settled the plaintiff has to file a Satisfaction of Judgment. Check the court records to make sure the plaintiff does file it. Don’t forget the clock is running, every day.

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.