The Default Judgment and the Former Roommate: Service, Limitations, and Frozen Social Security
On January 14, 2024, a debt buyer sued Ms. Pruitt for $4,880.10 on a charged-off credit card, plus interest and fees. On February 2, a process server left the summons with an adult male at 219 Rowan Street. Pruitt had moved out in November 2023; the man was her former roommate. Her change of address was on file with the post office but not with the court or the creditor. Default judgment entered March 18 for $7,412.66, including $1,150 in attorney fees, at 8% post-judgment interest. On July 9 a garnishment was served on her bank, and she learned of the judgment on July 11. The last payment on the account was November 2018, and the forum's limitations period for written contracts is four years. The card agreement contains an arbitration clause. Pruitt's only income is Social Security retirement of $1,910 per month, deposited in the garnished account.
1. What motion should be filed, by when, and on what grounds? Identify the facts that must be proved and the relief to request.
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Move promptly to vacate the default judgment under the forum's equivalents of Rule 55(c) and Rule 60(b), and ask for a stay of the garnishment. Do not wait; delay is itself a reason to deny relief, especially where a bank account is frozen.
The strongest ground is Rule 60(b)(4): the judgment is void for invalid service. Service by leaving the papers at a dwelling requires delivery at the defendant's dwelling or usual place of abode to a person of suitable age and discretion who resides there. Pruitt moved out in November, so 219 Rowan Street was no longer her abode and the former roommate was not a resident of her home. Prove this with her lease or deed, utility bills, a change-of-address confirmation, and the roommate's affidavit stating when she left and that he did not forward the papers. Rule 60(b)(4) has no fixed one-year deadline, but the motion must still be brought within a reasonable time.
Plead alternatives: Rule 60(b)(1) excusable neglect, filed within one year of March 18, and Rule 60(b)(6) for the residual equities, including the limitations defense and exempt income. Also attack the fee award: request the affidavit supporting $1,150 and the interest computation.
2. What meritorious defenses does Pruitt have, and what are the risks of opening the judgment?
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Limitations is the central defense. Under a four-year period for written contracts, the clock ran from the last payment in November 2018 and expired in November 2022; suit was filed in January 2024. Check for any later acknowledgment or partial payment that could restart the clock, and check whether the debt buyer pleads account stated, which may have a different accrual date. Also demand the chain of assignment from the original issuer; a debt buyer that cannot trace ownership fails on standing and on the merits.
Opening the judgment is not costless. It revives the plaintiff's ability to litigate, and if the limitations defense fails, Pruitt faces the same $7,412 plus additional interest and fees. The arbitration clause is a trap in both directions: moving to compel may be met with waiver arguments because the plaintiff chose to sue, and arbitration may be a worse forum for a limitations defense. Evaluate it only after the motion to vacate succeeds.
A counterclaim may add leverage. Garnishing exempt Social Security benefits and suing on a time-barred debt can support FDCPA claims, with a one-year limitations period running from the July 9 garnishment. Circuit law differs on time-barred debt, so research the forum before pleading.
3. What immediate steps protect the garnished funds, and what should the client be told about the money already taken?
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Social Security retirement benefits are exempt from garnishment under 42 U.S.C. section 407, and state exemption statutes usually add protection. Send the bank written notice of the exemption and a copy of the motion to vacate and any stay order, and file a claim of exemption with the court along with a request for an immediate hearing. Ask for release of funds already seized and for an order directing the bank to stop withholding.
Document the source of the deposits. Obtain two months of bank statements showing the recurring Social Security deposit, the award letter, and a benefits verification printout. If other funds were commingled, trace them; exemption arguments are weaker for money that cannot be identified as benefits.
Tell the client plainly: the money may be tied up for weeks, the bank will not act on a phone call, and she should not move the remaining funds into a different account to evade the garnishment, which could create new problems. Advise her to keep enough for ordinary living expenses and to route future deposits to an account used only for benefits if possible. Finally, ask whether the plaintiff or its attorney received notice of the exemption and continued to withhold; that fact may support a separate claim and a fee request.