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How to vacate a default judgment on an old debt (2026)

You just found out a creditor won a court judgment against you for a debt you never knew was in court — maybe through a garnishment notice or a frozen bank account. That sinking feeling is normal, and you may still have options. This page explains, in plain terms, what happened and what you can do next.

RC
By Renee Calderon — Consumer debt & rights writer

This is informational, not legal advice — judgments and deadlines are governed by your state's rules and the facts of your case. Before you act, it is worth a short call to a lawyer or a free legal-aid office, because the strongest move depends on details only they can weigh.

What a default judgment is and why it happened

A default judgment is what a court typically enters when a creditor sues over a debt and you do not respond by the deadline. It does not mean a judge weighed the evidence and decided you owe the money — it usually means no one showed up to argue your side, so the creditor won automatically. People most often end up here because they were never properly notified of the lawsuit, the paperwork went to an old address, or the suit looked like junk mail and got set aside. Once a default judgment is entered, the creditor can usually pursue collection tools such as wage garnishment, a bank levy, or a lien, depending on your state. Because the case was never actually contested, courts generally provide a path to ask that the judgment be "vacated" — set aside — if you act fast and have a legitimate reason. The sections below walk through whether you might qualify and how to ask.

Grounds to vacate a default judgment

Courts will not undo a judgment just because it is inconvenient — you generally need a recognized legal ground. The most common ones are:

Whether a ground is strong enough is fact-specific. A lawyer or legal-aid attorney can quickly tell you if yours is worth filing on.

How to file a motion to vacate (and the deadline)

To challenge the judgment, you typically file a "motion to vacate" (or "set aside") with the same court that entered it. The motion explains your ground — for example, that you were never served — and usually must be supported by a sworn statement and any evidence you have. Many courts publish self-help forms and instructions for this exact request. The most important thing to know is that the deadlines are strict and vary by state and by the reason: some grounds allow a year or more, others give you only a short window after you learn of the judgment. Do not wait to see what happens — missing the deadline can permanently close this door. If you can, file before any garnishment or levy takes effect; in some cases filing the motion can pause collection while the court decides. Because the paperwork and timing are unforgiving, this is exactly where free legal aid or a consumer-law attorney earns their keep.

If the judgment stands - settle or arrange payment

If the debt is genuinely yours and you cannot get the judgment vacated, the goal shifts to resolving it before collection escalates. Creditors holding a judgment will often still negotiate, because getting paid voluntarily beats chasing assets. For unsecured debts of roughly $7,500 or more, options include a lump-sum settlement for less than the full balance or a structured payment plan. A debt settlement company can negotiate on your behalf; under the FTC's Telemarketing Sales Rule, such companies may charge fees only of about 15-25% as debts are settled — no upfront fees. Settlement is not guaranteed, it can damage your credit, and a forgiven balance over $600 may be reported to the IRS on a 1099-C as taxable income. Get any agreement in writing before you pay, and confirm whether it releases the judgment.

Reach out for legal help as early as you can — ideally the day you learn about the judgment. Free or low-cost legal aid is widely available, and an attorney can confirm whether your service was improper, whether the statute of limitations applies, and whether your deadline is days or months away. The CFPB and FTC both publish consumer guidance on debt collection lawsuits and your rights, and many courts run self-help centers. If a lawyer is out of reach, your local legal-aid society or a law-school clinic may take the case at no charge. Whatever you do, act quickly: the windows here are short, and the difference between filing on time and a day late can be the difference between a fresh chance and a permanent judgment.

Is debt relief the right move for your situation?

Debt relief isn't right for everyone, and it has real trade-offs (it can affect your credit and may have tax consequences). Here's an honest read before you talk to anyone.

It may be worth a look if…

  • You have $7,500 or more in unsecured debt (credit cards, personal loans, medical bills, collections).
  • You're struggling to keep up with minimum payments — not just looking to consolidate.
  • You can set aside a monthly amount into a dedicated savings account for settlements.

It's probably not the fit if…

  • Your debt is mostly secured (mortgage, auto) or federal student loans — these don't qualify.
  • You can comfortably pay your balances off within a normal payoff window.
  • You live in a state a given provider can't serve (e.g. NDR isn't available in CT, OR, VT, WV).

Excluded states for our main partner: CT, OR, VT, WV. We surface other vetted options where it can't serve you.

If the debt is valid, see if you can settle it

Free estimate on the provider's own site - no obligation.

Unsecured debt ≥ $7,500 · not available in CT/OR/VT/WV
See if you qualify →

Frequently asked questions

What is a default judgment on a debt?

A default judgment is a court ruling a creditor wins automatically because you did not respond to the lawsuit by the deadline. It is not based on the merits of the debt — only on the missed response. Once entered, it can let the creditor pursue wage garnishment, bank levies, or liens, depending on your state. The good news: because no one argued your side, courts often have a process to set it aside ("vacate") if you act quickly and have a valid reason.

Can I get a default judgment vacated?

Sometimes. You typically file a motion to vacate (set aside) the judgment with the same court. Common grounds include improper service (you were never properly notified of the suit), a valid defense to the debt, an expired statute of limitations, or mistaken identity. There are strict deadlines that vary by state, so do not wait. This is legal-adjacent and fact-specific, so a lawyer or a free legal-aid office can tell you whether your grounds are strong before you file.

How long do I have to vacate a default judgment?

Deadlines vary widely by state and by the reason. Some states give you a year or more to challenge improper service; others impose much shorter windows (sometimes weeks) for other grounds. Because missing the deadline can cost you the chance entirely, check your state court's self-help resources or contact legal aid as soon as you learn about the judgment.

What if the judgment is valid and I can't get it vacated?

If the debt is genuinely yours and the judgment stands, your focus shifts to resolving it before collection escalates. For unsecured debts of roughly $7,500 or more, you may be able to negotiate a lump-sum settlement or set up a payment plan — many creditors will deal once a judgment exists. A debt settlement company can negotiate on your behalf for fees charged only as debts are settled (no upfront fees). Settlement is not guaranteed, can hurt your credit, and a forgiven balance over $600 may be reported to the IRS as income on a 1099-C.

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