Thursday, July 07, 2011

Vacate a Judgement against you by filing an Order to Show Cause. Stop wage garnishments or the sale of your property! By Brooklyn, NY Bankruptcy Attorney

My name is George M. Gilmer. I am a Brooklyn Debt Settlement Lawyer and Bankruptcy Attorney.  Has someone obtained a Judgment against you which has lead to your bank accounts being frozen or your wages being garnished? A judgment is the court's written, final decision in the case.  If this is the case, the law might be on your side and you might be able to reopen your case and even under some circumstances dismiss the matter against you. The ability to vacate a judgment against you is a powerful tool and can help you avoid a drastic measure such as Bankruptcy and can give you increased bargaining power in settling your debt by Stipulation.

Most of my clients come to me in desperation because their bank accounts have been frozen and they have discovered that a default judgment was entered against them in Court. When a defendant fails to appear in court ("defaults") the court will issue a judgment against the defendant.  Most of my clients ask me, “George, how could this happen? I was never served with any papers.”

Then I tell them the good news. I tell them that we can file either a Motion to Vacate or an Order to Show Cause seeking to vacate the judgment (both will be referred to as a “Motion” from here on) and also requesting the lifting of any restraints on bank accounts and wage garnishments. This generally means that the client’s money will be freed and that the weekly or bi weekly deductions will cease during the lifetime of the motion. The law that covers the vacating of most judgments in New York is CPLR 5015(a).  The party that has a Judgment against them can file the above mentioned Motions in the Court where the Judgment was obtained.  The court can relieve a party of a Judgment on numerous grounds. 

One of the grounds is excusable default.  This has to be done within one year of the service on you of the copy the notice of the judgment or within one year of the entry of the judgment. If you were not served with the copy of your judgment then your time to file the motion has not started.  You will have to show a reasonable excuse and meritorious defense to prevail in this motion, a present this in a document called an Affidavit of Merit.

A good example of a reasonable excuse is that you never received the papers telling you to come to court.  If you have been served with legal papers, you generally have twenty to thirty days to appear and put in an answer to the Summons and Complaint. If you don’t, you will be held in default. Another reasonable excuse maybe that you were sick, out of town, or incarcerated.  There are occasions when you receive a Summons, you call the Plaintiff attorney, and they tell you not to go to court, this may be seen as a reasonable excuse.

The meritorious defense is also a necessary element. The most obvious defense is that you don’t owe the money for some reason. This could be because of identity theft, you were never notified about the debt (nor provided validation of), the Statute of Limitation on your debt has run, a mistake by the person suing you in calculating the money owed, that you were only an authorized user on the credit card, that you filed for bankruptcy or that you never had a business relationship with the party in question.

Another defense that most be added to your motion to vacate is the general defense that the court did not have jurisdiction over you to enter the judgment against you in the first place.  This is CPLR(a)(4).  Here, a meritorious defense should not be required by the court (although some judges do, so it should be included nevertheless) and raises a Constitutional issue, Notice and Opportunity to be heard.

Whenever a motion is present where lack of service is alleged, the Plaintiff will have the burden to come with up with an Affidavit of service which serves as prima facie proof of service.  It is always wise to look at the copy of the Affidavit of Service prior to filing any motion to vacate, so the allegations contained in that Affidavit of Service can be scrutinized by you and your attorney and you can rebut the allegations in your Affidavit of Merit. Thus even if the Plaintiff presents an Affidavit of Service, if your moving papers successfully rebut the Affidavit of Service then you will be entitled to what is called a Traverse hearing, where your attorney will have the opportunity to cross examine the process server that filed the Affidavit.  There has been a great deal of litigation over service and there have been many case where service never took place, but affidavits of service were filed by the plaintiff nevertheless.  This is considered fraud and can lead to very serious consequences for the filer. 

Most importantly, the Plaintiff, if they can’t prove that service was ever effectuated, and 120 days have passed since the Summons and Complaint was filed, you can move to have the case dismissed for failure to serve within the proper timeframe.  This is huge if the Statute of Limitations has run on your case, because then, you cannot be sued again.  If the Statute of Limitations hasn’t run, then the Plaintiff will generally be allowed to refile.

The other less common ground used are CPLR 5015(a)(2), newly discovered evidence, if introduced at the trial,  would probably  have produced a different result and which could not have been discovered in time to move for a new trial.  The moving party needs to thus show a very good excuse for not presenting the evidence at the time of trial and there are not many excuses for failing to produce evidence at trial.

Another reason to reopen a judgment because it was obtained by fraud, misrepresentation, or other misconduct of the party that has the judgment.

Finally there are situations where, both sides can mutually agree to vacate a default by Stipulation. This is often used when the sides have negotiated a settlement of the debt owed.  The vacating of a Judgment after it was entered is an important device used to clean someone’s credit of derogatory information.  My advice is, if you want to settle your debt with say, a credit card company, it is advisable before you make payment, to get an agreement from the company to vacate the judgment by Stipulation so that the derogatory information on your credit report is removed.

In conclusion, if you have a judgment against you, your bank account is frozen and your wages have been garnished you can file an Order to Show Cause in the Court that has the Judgment against hyou to attempt to Reopen or even dismiss the judgment against you. The mere filing of the Order to Show Cause or Motion to Vacate will increase your bargaining power in negotiating the settlement of your debt.