World Global Financing INC Litigation: 5 Reasons Default Judgment Is the Real Risk

World Global Financing is a Florida-based merchant cash advance company. The biggest danger is that a judgment is entered against the business without the business appearing in court. The allegations get treated as admitted facts. The real risk is default judgment, not the underlying legal arguments regarding the contract.

In court, “default” is a word of defeat, not a simple mistake. What feels like a paperwork mix-up the clerk will kindly fix transforms into an unfavorable legal fact the judge relies on. The plaintiff has a meaningful advantage early on. From that point forward, the question is often how much does the defendant owe.

1. The clock starts at service

When your business is sued, the paperwork will include instructions about how to respond and the deadlines. In Florida, most civil court cases require a written response within 20 days after you’re served with the lawsuit. In New York, the time limit is 20 days from personal service, or 30 days otherwise. It’s easy to let 20 days go by when life is busy.

Substituted service is tricky to track. The important part of substitute service in New York is the affidavit. The process is finished 10 days after the affidavit is filed.

2. Most defaults are accidents

A substantial number of the defaults against businesses are not situations where the business owner was aware of the lawsuit and chose not to respond. You might miss a deadline because the registered agent delivers papers late. People also sometimes drop the ball because of other communication issues: maybe the lawsuit landed on the desk of an employee who didn’t recognize the importance of court papers. The clock keeps ticking, even if the papers went to an old office. You might also assume that another person was handling it, like your partner or insurance company. It’s also not unusual for people to assume that talks between the parties have paused the deadline. Courts move forward on their calendar, whether the people involved show up or not. Always assume the deadline is in place until you know otherwise.

3. Default admits their story

When a business fails to respond to a lawsuit in time, the court finds that the business has essentially admitted the other side’s allegations. It does not matter whether you think it is valid, or whether you think you can explain and defend the situation. From the judge’s point of view, if someone makes a factual allegation and the opponent doesn’t contradict that, it’s true. The person suing you gets a big advantage, because they no longer have to prove their allegations. The defendant loses the opportunity to contest those issues. Default is leverage. It puts pressure on defendants to settle.

Default does not mean that the plaintiff wins every claim they made. The court still needs to make findings about the amount of damages. Unopposed, this step is often a hearing that isn’t a full trial, and they may get attorney’s fees if the contract allows.

In New York, the clerk of court enters the judgment without a judge if it’s clear from the paperwork that the money is due and is for a sum certain. The judgment is for the amount requested plus costs and interest. New York encourages quick action by dismissing the claim if the plaintiff waits over a year to seek the default judgment unless they have a good reason for the delay. When a company is served through the Secretary of State, then the plaintiff has to mail an extra summons copy to the company’s last known address, at least 20 days before the judgment.

4. The judgment follows the business

A judgment can haunt your business for many years. For example, having a judgment against your business can lead to bank levies, liens, and questioning about your business’ assets. It can hurt your credit and banking relationships, licensing, and future financing. Judgments can also bring direct, personal exposure to the owner in certain circumstances. Judgment debt doesn’t just go away on its own.

In New York, judgments on business debts carry interest at nine percent a year. A restraining notice freezes your bank accounts for up to one year. Judgments in New York are only presumed paid after 20 years. Before then, the creditor is allowed to chase and collect the debt. If you make partial payment or write them and acknowledge you owe the money, the clock resets.

5. Undoing it gets harder daily

Undoing a default and judgment is possible, but it becomes harder as time passes. But you will need good reasons to change the court’s mind about the default. Florida law allows a court to set aside a default based on “excusable neglect,” a “meritorious defense,” and “prompt action.” Normally, a business would need to show all three to get relief. In New York, you can make a motion to vacate for excusable default within one year after the judgment was served with notice of entry. If you let enough time go by, you might not be able to vacate the judgment even if you want to. If you act fast, you often keep strategic options that fade away after time passes. Depending on the situation, you might be able to reopen the case, limit the judgment amount, or negotiate something better than a total loss.

If you are late, or missing the deadline, you need to find out first: Was service of the court papers proper? Has the court entered a default yet? If it has, what deadlines remain? What defenses might your company offer? When you know the answer to those questions, you can think through the options for responding or defending your interests. When faced with a default judgment, it’s understandable to panic and feel it’s game over, but courts apply objective standards of law, not good intentions. Hiring a lawyer can give you a chance to try and reverse it, or limit the fallout. Letting more time go by will usually just make the case stronger on the other side. So the sooner you respond and get active, the better the chance of an outcome closer to what you really want.

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.