By Anica Cunanan, a Solicitor of Matthews Folbigg Lawyers in our Insolvency, Restructuring and Debt Recovery Group.
If you have ignored a Statement of Claim that has been served on you, the chances are that the person suing you is in the process of obtaining default judgment or may already have obtained default judgment against you.
After you have been served with the Statement of Claim, you will normally not get any notice of this step until the default judgment is being enforced against you. So what can you do about a default judgment?
What exactly is a default judgment?
Well…in circumstances where a defendant has not responded to a Statement of Claim within the (normally) 28 day deadline from being served, a court can enter judgment against the defendant. This occurs without any further hearing from the defendant, and is simply based on application by the plaintiff, who can establish to the court’s satisfaction that a claim was served (including service by substituted service) and that no defence or appearance has been filed on behalf of the defendant. A default judgment is a final judgment just as if there had been a contested hearing. The judgment creditor can enforce the default judgment in a variety of ways, including garnishing wages or bank accounts, examining the judgment debtor before the court, seizing property or applying for a bankruptcy notice to be issued.
So what?
This judgment will also appear on a debtor’s credit record and may have detrimental effects on financial credibility – lenders may place certain credit limits on accounts or conditions on obtaining a loan.
As people move around, change addresses and lose contact with businesses, it is not uncommon for judgment to be entered without debtors even knowing. Some people may not realise until they require a credit check, refinance or apply for a loan. Unfortunately, a default judgment will stay on a creditor record for at least 5 years.
What can be done about a default judgment? The best thing is to do something! Obtain legal advice about how to efficiently deal with a judgment, fix your credit record and resolve the judgment debt as soon as possible.
If you would like more information or advice in relation to assigning debts or insolvency, restructuring or debt recovery law generally, contact Anica Cunanan at anicac@matthewsfolbigg.com.au or a Principal of the Matthews Folbigg Insolvency, Restructuring & Debt Recovery Group:
Jeffrey Brown on (02) 9806 7446 or jeffreyb@matthewsfolbigg.com.au
Stephen Mullette on (02) 9806 7459 or stephenm@matthewsfolbigg.com.au
