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Defaults In Collection Cases

Reports are that the majority of consumer collection actions result in “defaults.” A default is a legal term that means the defendant has not responded to the plaintiff’s complaint within the time period provided by law. In that situation, the plaintiff can ask the court clerk to enter default against the defendant. The plaintiff then can move for a default judgment against the defendant.

Once the clerk has entered a defendant’s default, the defendant cannot appear in the lawsuit without getting the default removed, or in legal jargon, “set aside.” This means that the defendant cannot do anything in the case, including file any papers with the court or appear at any hearing. Cases often refer to a defaulted defendant as “out of court.”

After the clerk enters a default, the plaintiff can seek a default judgment, though it is not always required short of trial. The plaintiff generally must seek a default judgment from the judge, at what is termed a “default prove-up” hearing. But the plaintiff sometimes can seek a default judgment from the court clerk. A clerk’s judgment often is sought by debt collectors who claim a specific amount due under a credit card agreement or other contract.

It undoubtedly is important to avoid a clerk’s default and/or a default judgment. But even if there is a clerk’s default or a default judgment, the defendant can seek to set aside the default. Sometimes (but not often) the plaintiff will agree to set aside the default. In that event, the parties can file a stipulation with the court asking it to remove the default. If the plaintiff will not agree to set aside the default, the defendant will need to make a motion to the court to set it aside. Since there are specific legal reasons a court will look for in determining whether to set aside a default, it is strongly recommended that the defendant retain a lawyer.

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