Vacating A Default Judgment

This guide provides general information for Michiganders who are facing debt collection lawsuits in the Michigan civil courts. It does not apply to courts outside the state of Michigan. It is not a substitute for obtaining legal advice in your individual case.

What is a judgment?

A judgment is the court’s written, final decision in the case. If the judgment is against you, it will state how much money you owe to the plaintiff.

What is a judgment creditor?

A “judgment creditor” is a creditor or debt buyer that has obtained a judgment against a defendant.

What is a default judgment?

When a defendant fails to appear in court (“defaults”) the court will issue a judgment against the defendant. A judgment issued under those circumstances is commonly known as a “default judgment.” The court usually awards the plaintiff the amount demanded in the complaint, plus interest and court costs. The court usually does not award attorneys’ fees on a default judgment, but it may do so.

Can you re-open a default judgment?

Yes, but its not easy. Under certain circumstances, it is possible to vacate (re-open) a default judgment. The court will require that you file a motion to set aside the default with a legal brief explaining the circumstances on why you did not answer the complaint. The court will also require that you submit an affidavit of meritorious defense.

If you find yourself in such a situation, your best option would be to hire a lawyer to assist you in moving to set aside the default. On the other hand, if the judgment is for less than $7500.00, you may wish to proceed in “pro-per,” (representing yourself). In that case you will want to purchase my motion and brief with an affidavit of meritorious defense to use as a template.

What are the criteria for vacating a default judgment?

There are two main reasons that a court will vacate a default judgment: (1) excuseable neglect and (2) lack of personal jurisdiction. These reasons are explained below.

Excuseable Neglect

Excuseable neglect is the most common reason for vacating a default judgment. It has two parts: (1) a reasonable excuse for missing the original court date; and (2) a meritorious defense (a good defense).

There is a time limit for moving to vacate a judgment because of excuseable default — one year from the date you were served with a copy of the judgment. If you were never served with a copy of the judgment, your one-year clock has not started and you will have to assert fraud on the court for misrepresenting that you were actually served, (commonly referred to as sewer service – lawsuit was flushed down the toilet instead of being properly served.)

Common examples of a reasonable excuse: The most common example of a reasonable excuse is that you did not receive a summons telling you to come to court. Other reasonable excuses are that at the time you received the summons you were out of town, ill, incarcerated, unable to take time off from work, or that you could not answer the summons for some other good reason. You would also have a reasonable excuse if, in response to the summons, you telephoned the attorneys for the plaintiff and they told you not to bother going to court.

Sometimes people do not respond to the summons because they do not understand what it is. This is not considered to be a reasonable excuse; most judges will not accept it.

Common examples of a meritorious defense: A meritorious defense is a reason why you don’t owe the money, not a reason why you can’t pay. For example, if you would like to use the defense of identity theft, you would write: “This is not my debt. I am a victim of identity theft.”

For a list of possible defenses, see Common Defenses to Debt Collection Lawsuits. If you don’t know what else to write, most people can honestly state: “I dispute the amount of the debt.” Disputing the amount of the debt, combined with improper service, maybe a sufficient reason for the court to grant an order to show cause.

Lack of Personal Jurisdiction (improper service)

The court can also vacate a default judgment if you were not properly served with a summons

There are advantages and disadvantages to trying to vacate a judgment on the grounds of improper service. The main advantage is that there is no time limit for seeking to vacate a judgment on the grounds of lack of jurisdiction. The disadvantage of seeking to vacate a judgment on the grounds of improper service is that you have the burden of proving the bad service, which you must do at a special hearing. Proving improper service can be difficult depending on the facts of your case.

How do I vacate a default judgment?

First, find out which court issued the judgment. (In a debt collection case, you will most likely need to go to the civil court in the county where you live.) Next, go to the court that issued the judgment and find the civil court clerk’s office. There, tell the clerk that you want to file a “motion to set aside.” You can ask the clerk to give you a pre-printed form to fill out.

What should I write on the “motion to set aside”?

A “motion” is nothing more than a request (best if in writing) for the court to do something. In your “motion to set aside”, you need to explain why the court should vacate the judgment. In other words, you have to establish excuseable default, or lack of jurisdiction, or both. We recommend that you always include on the form (a) the reason why you did not appear in court; and (2) a meritorious defense. If you need help deciding what to write on your Motion to set aside, please call my office at (810) 653-3300.

Should I write anything else on my motion to set aside?

If you have a frozen bank account that contains exempt funds, if your wages are being garnished, or if there is some other emergency situation requiring that your judgment be vacated more quickly than usual, you should include this information in your motion.

What happens after I file my motion to set aside?

You will have to serve your motion on the attorney for the plaintiff. You will also need to schedule a hearing date, which the clerk will give you. You need to serve the notice of hearing on the plaintiff’s lawyer as well. The best practice is to file a proof of service with the court certifying that you served your motion and notice of hearing on the plaintiff’s lawyer by first class mail on the date you mailed it.

What happens at the hearing date?

At the hearing date, you will most likely find yourself sitting in a courtroom with a number of other people who are in the same position as you. The court clerk will call out your name, and you should answer clearly. The attorney for the plaintiff may call out your name as well. The plaintiff’s attorney might ask whether you want to make a settlement agreement. No matter what the plaintiff’s attorney says to you, it is important that you focus on making sure that the default judgment is vacated.

If the plaintiff’s attorney does not consent to vacating the judgment, you should ask to go before the judge. When you are before the judge, you must focus on the arguments you made in your motion. Simply keep repeating (1) your good reason for failing to appear in court; and (2) your defense in the case. As long as you have a reasonable excuse and a meritorious defense, the judge should grant the motion to set aside and vacate the judgment against you. If you want to argue lack of jurisdiction because you were not served with a summons, you must ask the judge for a hearing.

What if I have a frozen bank account or wage garnishment?

Once the default judgment is vacated, the plaintiff must release your bank account and cancel the wage garnishment. This is included in the court’s order vacating the judgment.

If the judgment is vacated, does that mean the case is over?

Probably not. In fact it probably means the case is just beginning. In most cases, even though the judgment is vacated, you still have to defend the case. That means you have to file an answer and attend at least one additional court date.