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Default Judgments

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Default Judgment in New York: What It Means, How an Attorney Can Help, and Why Settlement Companies Cannot Defend You

What Is a Default Judgment?

A default judgment happens when a creditor or debt collector sues you and you do not respond to the summons within the time allowed by law. In New York, defendants typically have 20 or 30 days to answer a lawsuit, depending on how they were served (N.Y. CPLR § 3012). If you fail to respond, the court assumes you do not contest the case and grants the creditor a judgment automatically.

That judgment gives the creditor powerful collection tools:

  • Wage garnishment (taking part of your paycheck)【NYC Bar†L54-L60】
  • Bank account restraints (freezing funds in your account)【NY Courts†L70-L75】
  • Liens on property (placing a claim against your home or other real estate)

Unlike a collection letter or phone call, a judgment is legally enforceable and can last for 20 years in New York (CPLR § 211(b)).

Why Default Judgments Are So Common

Many New Yorkers never even realize they’ve been sued until after their bank account is frozen. Creditors often serve papers to old addresses or rely on “sewer service,” where a process server claims to deliver papers but never does. According to a study by the New York State Unified Court System, over 70% of consumer debt cases result in default judgments【NY Courts†L40-L46】.

This makes default judgments one of the most dangerous threats for anyone struggling with credit card or personal loan debt.

What an Attorney Can Do About a Default Judgment

Hiring an attorney after a default judgment has been entered is not too late. In fact, it may be the most critical time to have legal representation. An experienced consumer-debt attorney can:

File a Motion to Vacate the Judgment

If you were never properly served or if you had a legitimate reason for not responding (excusable default), your lawyer can file a motion to vacate under CPLR § 5015. Vacating the judgment reopens the case, giving you a chance to defend yourself in court.

Assert Defenses Under State and Federal Law

If you’re sued for consumer debt, your attorney can raise defenses that settlement companies cannot, such as the statute of limitations (three years in New York as of April 2022, CPLR § 214-i), improper service, lack of standing, or violations of the FDCPA (15 U.S.C. § 1692).

Negotiate From a Position of Strength

When a lawyer is involved, creditors know the consumer has legal defenses. That leverage often results in deeper settlements—sometimes pennies on the dollar—compared to what non-lawyer negotiators achieve.

Prevent Wage Garnishments and Account Freezes

An attorney can quickly move for court orders to stay enforcement while motions are pending. Without this, garnishments and freezes continue, draining your income.

Provide Strong Advocacy for You in Court

Only a licensed attorney can file motions, argue before a judge, or appear at trial. National debt settlement companies are prohibited by law from providing legal representation.

What National Settlement Companies Cannot Do

Debt settlement companies market themselves as a way to “reduce your debt.” But when a default judgment is entered, these companies are powerless. Here’s why:

  1. They Cannot Vacate a Judgment Only an attorney admitted in New York can file the necessary motion in court. Settlement companies cannot draft legal papers, argue motions, or appear before a judge.

  2. They Cannot Stop Garnishments or Bank Restraints Once a judgment is active, creditors can seize wages and bank funds. Debt settlement companies have no authority to stop enforcement actions. By contrast, an attorney can file immediate motions for relief.

  3. They Cannot Raise Legal Defenses Settlement firms cannot assert statute of limitations defenses, improper service arguments, or violations of consumer protection laws. These are legal defenses that require licensed counsel.

  4. They Charge High Fees Without Court Power Most national settlement firms take 15–25% of the total debt enrolled【FTC†L48-L55】, even though they cannot defend you in court. In comparison, attorneys typically charge for actual legal work performed, and their efforts can directly protect your assets.

  5. They May Violate New York Law In New York, only lawyers can provide legal advice or represent clients in legal proceedings. Settlement companies are not licensed law firms and cannot ethically or legally protect you from a judgment.

Real-World Example: Judgment vs. Attorney Defense

  • Scenario A – Using a Settlement Company John enrolls $30,000 in credit card debt with a national settlement company. After 8 months of making payments into the program, he’s sued by one of his creditors. The company tells him they “cannot help with lawsuits.” A default judgment enters, his bank account is frozen, and he cannot access his paycheck.

  • Scenario B – Hiring a Law Firm Like Georgiou Law Maria is sued on $30,000 in credit card debt. She hires Georgiou Law. We file an immediate response, move to vacate the judgment due to improper service, and assert the three-year statute of limitations defense. The court reopens the case, and we negotiate a settlement for 50% of the balance, stopping wage garnishment in the process.

The difference is night and day: one path leaves you vulnerable, the other empowers you with real legal protection.

Why Georgiou Law Is Different

At Georgiou Law, you don’t get routed to a call center or pressured into one-size-fits-all “programs.” When you call, you speak directly to an attorney who has represented both banks and consumers. That insider knowledge is used to fight back against aggressive creditors.

We provide:

  • Case-specific legal strategies tailored to your situation
  • Flat-rate and transparent fee structures (no hidden settlement percentages)
  • Aggressive negotiation backed by litigation readiness
  • Direct access to your attorney—not salespeople

Frequently Asked Questions About Default Judgments

Up to 20 years (CPLR § 211(b)).

Yes. Once a judgment is entered, creditors can garnish up to 10% of your gross wages or 25% of disposable income, whichever is less (CPLR § 5231).

Yes, if there was improper service or a valid legal defense. Every case is fact-specific, but courts routinely vacate judgments where due process was violated.

If you already have a judgment—or are being sued—no. They cannot defend you in court. Only an attorney can.

Take Action Now

A default judgment is not the end of the road. With the right legal help, you can stop garnishments, reopen your case, and fight back against creditors.

Call Georgiou Law today at (917) 764-3072 for a free consultation.

Don’t let a piece of paper signed by a judge control your financial future. With experienced legal counsel, you can take back control and negotiate from strength.

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