Woman going through debt collection documents

Setting Aside a Default Judgment in a California Debt Collection Lawsuit

When a debtor fails to properly respond to a debt collection lawsuit in California, he or she faces the prospect of a default judgment. A default judgment can result in garnished wages, the attachment of one’s bank accounts, and property liens. Unfortunately, however, default judgments are sometimes entered against people who never knew they were being sued. In addition, situations sometimes occur in which a defendant has knowledge of a lawsuit but fails to respond for some excusable reason. In these types of situations, it may be possible to set aside the default judgment, thereby giving the debtor an opportunity to respond to the lawsuit. In this article, we discuss setting aside a default judgment in a California debt collection lawsuit.  

Mistake, Inadvertence, Surprise, or Excusable Neglect 

When a party fails to respond to a debt collection lawsuit as a result of mistake, inadvertence, surprise, or excusable neglect, a court may set aside a resulting default judgment. Examples of this ground to set aside a default judgment include:

  • Reliance on a lawyer that failed to act 
  • A disabling illness
  • Reliance on a court officer that provided misinformation

Void Judgments 

A court may also set aside a default judgment if the judgment is void on its face. In other words, a court may set aside a judgment against a debtor if it is clear from the record that the judgment is defective in some way without the need for the debtor to present additional evidence. Although the recipient of a default judgment may move for this relief at any time, courts have held that such relief should be requested in a reasonable time frame.

Extrinsic Fraud or Mistake

Extrinsic fraud or mistake are non-statutory grounds for setting aside a default judgment. These are equitable forms of relief that give courts the discretion to set aside a default judgment when a party doesn’t receive fair notice. Extrinsic fraud is a broad term that includes all circumstances in which a party was deliberately prevented from responding to a debt collection lawsuit. For example, the falsification of a proof of service is a type of extrinsic fraud. And an example of an extrinsic mistake is when a defendant relies on the representation of an incompetent attorney. 

Lack of Actual Notice 

Finally, a lack of actual notice means that a party to a debt collection lawsuit had no idea that a lawsuit existed even though service may have been accomplished by proper means. A party seeking relief due to lack of actual notice must prove that he or she had no actual knowledge that the lawsuit existed. 

Contact a Debt Collection Lawsuit Defense Attorney 

If you are facing a default judgment in your debt collection lawsuit in California, you must act quickly. At the Fullman Firm, our California debt collection lawsuit defense attorneys are here to protect your rights as a consumer. When you come to us for assistance with your debt collection lawsuit, we will guide you through the legal process while doing everything in our power to obtain a successful result on your behalf. Please contact us today to schedule a free consultation.