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I recently met a client who first learned that she had been sued when she received a post card in the mail from the court indicating that a default judgment had been entered against her.  Frequently I meet clients who first learn of a judgment when their paychecks or bank accounts become garnished.  “How can they garnish me when I never had a chance to go to court!” is the common complaint.

Over 90% of all collection lawsuits result in a default judgment.  Most folks just figure they owe the debt and chose not to contest the lawsuit, even if the amounts are wrong.  However, a big reason for default judgments is that the defendant moved and the lawsuit summons was served at an old address.  So, when the Sheriff cannot serve the lawsuit because the has defendant moved the Sheriff will typically file a report with the court that says “attempted to deliver, defendant not found at this address, unable to deliver summons.”  The Sheriff typically does not report that the defendant has moved to another address, he just reports that the defendant could not be served.

The Problem of Alternate Service: 

 So, what does the creditor do when they cannot serve summons to the defendant at his or her last known address? They file a Motion for Alternate Service.  Under this procedure, the Sheriff will go back to the last known address and tape a copy of the summons to the door and the creditor will also send a copy by regular U.S. mail.    Now that is all fine and dandy if the defendant actually lives there, but what good is this when the defendant has moved?  Of course, the defendant who no longer lives at the former address never gets a copy of the lawsuit and consequently does not file a written response with the Court.  The result?   Yes, the creditor gets a default judgment since no written response was filed with the court and garnishments soon follow.

A recent client reported that the Sheriff actually served notice on her 10 year old daughter who then failed to give it to her mother.  Service on a ten year old?  Can they really do that?

The Solution: Motion to Vacate Default Judgment:

If a creditor has not properly notified you of a lawsuit and obtained a default judgment as a result, the corrective action is to file a Motion to Vacate the default judgment.  The Nebraska court system provides a standard form.  Here is a better form.  It is important to tell the court why the service was ineffective (i.e., you moved or you were on vacation or the person who accepted service did not give you a copy ,etc.).  A recent client reported that the Sheriff actually served notice on her 10 year old daughter who then failed to give it to her mother.  Service on a ten year old?  Can they really do that?  Actually, that notice was somewhat questionable, but the creditor got a default judgment anyway.   

The practice of allowing creditors to obtain default judgments by alternate service is especially troubling when the same creditor has been calling the debtor at work on a regular basis.  Why didn’t the creditor have summons served at work when residential service was note made?  A typical motion for alternate services states the following:  “The Plaintiff shows and affirms to the Court that the Defendant cannot be served by reasonable diligence by one of the following methods of service:  Personal service, residence service or certified mail service, and as a result moves the Court to allow the use of an alternate method of service as provided by statute.”  I would argue that Reasonable Diligence requires at at least one attempt to serve at work, especially if the debt collector has been calling their work, and that failure to make such an effort could be viewed as a violation of the Fair Debt Collection Practices Act.

Image courtesy Flickr and David Singleton.