There are two ways that a creditor can obtain a judgment against a debtor. In the context of litigation, the two individuals or entities are also called the plaintiff (creditor) and the defendant (debtor).
The first way for the plaintiff/creditor to get a judgment against a defendant/debtor is for the factfinder – a judge or a jury – to make a ruling that the creditor has proven all of the aspects of its case by a standard called the “preponderance of the evidence.” This means the creditor has put forward a showing of more than 51% evidence – whether through billing statements, proof of no payment, or similar – that the creditor is entitled to a favorable judgment.
The other way for a creditor to win is by “default.” Default happens when the defendant/debtor fails to defend himself or herself in the lawsuit.
As an expert attorney in the field of judgments, Houston judgment collection lawyer, Seth Kretzer, will almost always recommend to his clients to actively participate when they are sued – by filing a responsive answer or motion, by showing up to court on the day they are ordered to, and by providing discovery answers if the suit goes that far – rather than being placed in the undesirable position of default.
Mr. Kretzer and his team are here to help clients at all stages through the process of defending in a judgment collection lawsuit. Whether the judgment is won against you on the merits or won by default, there is a way to get the judgment wiped out, as if it never happened. This is called “vacating” the judgment.
What Is a Vacated Judgment?
The word “vacate” itself is defined in the dictionary with two distinct meanings. In common usage, it means to leave a place that one previously occupied, such as to vacate the premises. In the legal world, vacate has a special meaning of its own – to cancel or annul a judgment.
But both ways work just fine for our understanding. A vacated judgment is both canceled/annulled, and the judgment is also considered to have “left” the case, allowing the defendant’s attorney a chance to continue to defend on his or her behalf.
Vacating a judgment can provide valuable time for negotiation in cases involving creditors and debtors. With the proper grounds, vacating a judgment should be considered when a judgment has been entered against the defendant/debtor.
Reasons to Vacate a Judgment
Texas Rule of Civil Procedure 320 states that a judge may set aside a judgment and order a new trial “for good cause.” The only specific grounds mentioned under the rule are the damages being “manifestly” – or put another way, at their very core – too small or too large. The Texas Supreme Court has held that if the trial judge finds that a new trial is “in the interest of justice and fairness,” then the court should set aside the judgment and proceed with a new trial.
Notwithstanding the ends of “justice and fairness” set out in Rule 320, five trial errors are specifically named in Texas Rule 324 that can be explored for the purposes of a motion to vacate the trial or judgment.
- The first is a claim of newly-discovered evidence which should properly be heard by the court.
- The second is any claim that the evidence which the court already heard was insufficient to support the court’s finding.
- Third, if the evidence was overwhelmingly contrary to the final decision.
- Fourth, any claim that the awarded damages are either inadequate or excessive – too low or too high – must be heard.
- And finally, any claim that a party made an incorrect legal argument to a jury and court did not step in and correct that error can be the basis for a motion to vacate.
While most motions to set aside a judgment must be filed within thirty (30) days, the rules allow losing parties to vacate a judgment up to two years later if they were not present at the original proceedings, such as in the case of a default judgment in Texas. Rule 329 sets out the procedures for this type of motion to vacate a default judgment.
What Are the Consequences of Vacating a Judgment?
It is important to know what happens after a judgment is vacated. After a judgment is vacated, the lawsuit itself continues onward. In fact, vacating the judgment brings the lawsuit back to life again for the defendant, and you will need prompt defending as soon as the matter is vacated.
Practically speaking in terms of creditor-debtor cases, the lawsuit will also continue to show up on a debtor’s credit report, though the judgment will no longer be reported to the credit reporting agencies. This is because the final judgment has been vacated.
What If I Have No Grounds to Vacate a Judgment?
You may be wondering how to stop a default judgment if you don’t have the necessary grounds to vacate the judgment under Rule 324. In this case, you will want to work with your judgment settlement attorney to instead come up with a voluntary repayment plan or lump sum settlement to present to the judgment creditor.
This may lead to a voluntary “stipulation of settlement” being drafted for the parties to sign, in which case vacating the judgment won’t be necessary. If a voluntary settlement can be achieved at this stage, the settlement document will be filed instead, resolving the case. Think of this option as a detour that ultimately leads to the same destination. It may even be a shortcut because a case settled between the parties eliminates the need for any further litigation.
How to Vacate a Judgment in Texas
Vacating a judgment in Texas requires an order to vacate the judgment by the court which heard the original case, and this is accomplished by way of a motion to vacate a default judgment. A motion is any type of pleading where your attorney organizes the facts and applicable laws and asks the court for relief on your behalf.
Attorney Seth Kretzer Can Help with Judgment Defense
If you are a debtor seeking to vacate a judgment or learning how to avoid paying a judgment outright, you will need a lawyer with specific experience on judgments in Texas and who has the right knowledge and resources to help you. Contact Houston judgment lawyer Seth Kretzer through our website, or by phone 713-775-3050, to discuss your case.