Motion to Set Aside / Vacate Default Judgment (Debt) - Arkansas

IN THE [____________] COURT OF [____________] COUNTY, ARKANSAS

Case No. [____________]

DEFENDANT'S MOTION TO SET ASIDE / VACATE DEFAULT JUDGMENT

Filed Pursuant to Ark. R. Civ. P. 55(c) and 60

COMES NOW the Defendant, [____________] ("Defendant"), appearing [☐ pro se / ☐ by and through undersigned counsel], and respectfully moves this Court to set aside and vacate the default judgment entered against Defendant in this action on [__/__/____], pursuant to Ark. R. Civ. P. 55(c) and 60. In support, Defendant states as follows:

I. INTRODUCTION AND BASIS FOR RELIEF

1. This is a debt-collection action in which Plaintiff [☐ is a debt buyer / ☐ is a collection agency / ☐ claims to be the original creditor] seeks to collect an alleged consumer debt. A default judgment was entered against Defendant on [__/__/____] in the amount of $[____________], plus [interest, costs, and/or fees].

2. Defendant did not receive proper notice of this action and/or had good cause for not responding, has one or more meritorious defenses to the alleged debt, and brings this motion within a reasonable time after learning of the judgment.

3. Arkansas policy favors deciding cases on their merits, and Rule 55 is to be liberally construed to that end.

II. IDENTIFICATION OF THE DEFAULT JUDGMENT

4. Date of judgment. The default judgment was entered on [__/__/____].

5. Amount. The judgment is in the amount of $[____________], consisting of [principal $[____], interest $[____], attorney's fees $[____], costs $[____]].

6. How Defendant learned of the judgment. Defendant first learned of the default judgment on [__/__/____] by the following means:

☐ A writ of garnishment served on Defendant's employer (wage garnishment)
☐ A garnishment, levy, or freeze of Defendant's bank account
☐ A writ of execution or other post-judgment process
☐ A credit report entry
☐ Other: [____________]

7. Defendant files this motion [____] days after first learning of the judgment, which is within a reasonable time under Ark. R. Civ. P. 55(c).

III. LEGAL STANDARD

8. Rule 55(c) — grounds to set aside a default judgment. "The court may, upon motion, set aside a default judgment" previously entered for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) the judgment is void; (3) fraud (whether intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; or (4) any other reason justifying relief from the operation of the judgment. Ark. R. Civ. P. 55(c).

9. Meritorious defense required (except void judgments). "Unless the ground asserted to set aside a default judgment is that the judgment is void, the defendant must demonstrate a meritorious defense to the action in addition to establishing one of the grounds of Ark. R. Civ. P. 55(c)." Tyrone v. Dennis, 73 Ark. App. 209, 39 S.W.3d 800 (2001).

10. A judgment without valid service is void. Service of process is the means by which a court acquires personal jurisdiction, and Arkansas requires strict compliance with the service rules. A default judgment entered when the defendant was never properly served is void for lack of personal jurisdiction and is subject to being set aside under Rule 55(c)(2); where the judgment is void, the movant need not show a meritorious defense and the motion is not subject to the same time constraints. Ark. R. Civ. P. 4, 12(b)(2), (4), (5).

IV. GROUNDS FOR SETTING ASIDE THE JUDGMENT

☐ A. The judgment is VOID — defective or no service of process; lack of personal jurisdiction. Defendant was never validly served with the summons and complaint in strict compliance with Ark. R. Civ. P. 4. Specifically: [describe — e.g., "Defendant did not reside at the address where service was attempted," "the return / proof of service reflects service on a person not authorized to accept it," "no signed certified-mail return receipt exists," "Defendant first learned of the suit through the garnishment"]. Because the Court lacked personal jurisdiction, the judgment is void and must be vacated. Ark. R. Civ. P. 55(c)(2).

☐ B. Mistake, inadvertence, surprise, or excusable neglect. Defendant's failure to respond was the result of excusable neglect and not of any disregard of the Court's process, in that: [describe — e.g., "Defendant was hospitalized," "the papers were misdelivered or received late," "Defendant reasonably believed the matter had been resolved or disputed with the collector"]. Ark. R. Civ. P. 55(c)(1).

☐ C. Fraud, misrepresentation, or misconduct of an adverse party. The judgment was obtained through fraud, misrepresentation, or misconduct by Plaintiff or its agents, including [describe — e.g., "a false affidavit or false proof of service," "misrepresentation of the amount owed," "concealment of the absence of any assignment"]. Ark. R. Civ. P. 55(c)(3).

☐ D. Any other reason justifying relief. [Describe any other circumstance warranting relief from the operation of the judgment.] Ark. R. Civ. P. 55(c)(4).

☐ E. Defendant has a meritorious defense (see Section V).

V. DEFENDANT HAS A MERITORIOUS DEFENSE

11. Except where the judgment is void, the movant must show a meritorious defense in addition to a Rule 55(c) ground. Tyrone v. Dennis, supra. Defendant is prepared to present one or more meritorious, fact-supported defenses that, if proven, would defeat Plaintiff's claim:

☐ Statute of limitations. The alleged debt is time-barred. An action on a written obligation must be brought within five (5) years (Ark. Code § 16-56-111(a)); an action on an oral contract, open account, or implied contract within three (3) years (Ark. Code § 16-56-105). The last payment/activity on the account occurred on or about [__/__/____], more than the applicable period before suit was filed. [Confirm characterization; a partial payment or written acknowledgment can toll/restart the period under § 16-56-111(b).]

☐ Not the debtor / mistaken identity / identity theft. Defendant is not the person who incurred the alleged debt and/or the account was opened or used as a result of identity theft. [Describe; attach FTC Identity Theft Report / police report as Exhibit [__].]

☐ Wrong amount. The amount of the judgment is incorrect, inflated, or includes unauthorized interest, fees, or charges (including charges that are usurious under Ark. Const. Art. 19, § 13). The correct balance, if any, is $[____________].

☐ Debt paid, settled, or discharged. The alleged debt was paid, settled, or discharged (including by discharge in bankruptcy on [__/__/____], Case No. [____________]) and is not owed.

☐ Plaintiff lacks standing / no chain of assignment. Plaintiff is not the original creditor and has not proven a complete, unbroken chain of assignment showing it owns Defendant's specific account; it is not the real party in interest under Ark. R. Civ. P. 17(a).

☐ No § 1692g validation; FDCPA violations. Plaintiff and/or its predecessor failed to provide the validation notice and verification required by 15 U.S.C. § 1692g and/or sued on a time-barred or unverified debt in violation of the FDCPA.

☐ Other meritorious defense: [____________]

12. These defenses are substantiated by the facts set forth in Defendant's Affidavit, below, and the attached exhibits, and are sufficient to warrant a trial on the merits.

VI. NO UNFAIR PREJUDICE TO PLAINTIFF; CONDUCT NOT CULPABLE

13. No unfair prejudice. Setting aside the judgment will not unfairly prejudice Plaintiff, which retains its evidence and its claim and loses only the advantage of a default. Defendant is prepared to proceed promptly.

14. Conduct not culpable. Defendant's failure to appear was not willful, intentional, or in bad faith; it resulted from [lack of valid service / excusable neglect], as set forth in the attached Affidavit.

VII. DEFENDANT'S AFFIDAVIT

STATE OF ARKANSAS )
COUNTY OF [____________] )

I, [____________], being first duly sworn, depose and state as follows:

1. I am the Defendant in this action. I am over the age of eighteen (18) and competent to testify, and I make this affidavit on personal knowledge.

2. I was never properly served with the summons and complaint in this case. [State the facts: where you lived on the date of attempted service; whether you received the papers; who, if anyone, was served; how you actually learned of the lawsuit.]

3. I first learned that a judgment had been entered against me on [__/__/____], when [describe — e.g., "my wages were garnished" / "my bank account was frozen"].

4. I have a meritorious defense to Plaintiff's claim, namely: [state the facts supporting the defense(s) checked above — e.g., the date of last payment, that the account is not mine, that the amount is wrong, that the debt was discharged in bankruptcy].

5. My failure to respond to the complaint was not intentional or the result of any disregard of this Court. [State the facts establishing excusable neglect or lack of service.]

6. I respectfully ask the Court to set aside the default judgment, allow me to defend this case on the merits, and stay any collection efforts in the meantime.

_______________________________________
[____________], Defendant

Sworn to and subscribed before me this [____] day of [____________], 20[____].

_______________________________________
Notary Public
My commission expires: [__/__/____]

VIII. REQUEST TO STAY EXECUTION AND GARNISHMENT

15. Defendant requests that the Court stay execution on the judgment — including any wage garnishment, bank garnishment, levy, or other post-judgment process — pending the Court's ruling on this motion. Ark. R. Civ. P. 62. Absent a stay, Defendant faces immediate and irreparable harm from the garnishment of wages or funds that may be exempt and that Defendant needs for basic living expenses, even though the underlying judgment is subject to being vacated.

16. Defendant further requests that any funds already garnished or levied be held by the garnishee or the Court, and not disbursed to Plaintiff, until this motion is decided.

IX. RELIEF REQUESTED

WHEREFORE, Defendant respectfully requests that this Court:

A. SET ASIDE and VACATE the default judgment entered on [__/__/____];

B. STAY all execution, garnishment, levy, and other post-judgment collection proceedings pending the Court's ruling, and order that any funds already garnished or levied be held and not disbursed;

C. QUASH any outstanding writ of garnishment or execution issued on the judgment;

D. GRANT Defendant leave to file an Answer and defend this action on the merits, with the accompanying [proposed] Answer deemed filed as of the date of the order;

E. Set this matter for a hearing if the Court deems one necessary; and

F. Grant such other and further relief as the Court deems just and proper.

X. PROPOSED ORDER

A proposed Order Setting Aside Default Judgment is submitted contemporaneously with this motion.

[PROPOSED] ORDER

This matter came before the Court on Defendant's Motion to Set Aside / Vacate Default Judgment under Ark. R. Civ. P. 55(c) and 60. Having considered the motion, the supporting affidavit, any response, and the applicable law, the Court finds that the motion is due to be GRANTED.

It is therefore ORDERED that the default judgment entered on [__/__/____] is SET ASIDE and VACATED; all garnishments, levies, and executions on that judgment are QUASHED and STAYED, and any garnished or levied funds shall be returned to Defendant; and Defendant is granted leave to file an Answer within [____] days of this Order.

IT IS SO ORDERED this ____ day of __________, 20____.

_________________________________
Judge

XI. SIGNATURE

Respectfully submitted this [____] day of [____________], 20[____].

/s/ [____________________________________]

[____________________________________]
☐ Defendant, pro se ☐ Attorney for Defendant
Arkansas Bar No. (if attorney): [____________]
[Street Address]
[City], Arkansas [____]
Telephone: ([____]) [____]-[________]
Email: [____________________________________]

XII. CERTIFICATE OF SERVICE

I hereby certify that on the [____] day of [____________], 20[____], I served a true and correct copy of the foregoing Defendant's Motion to Set Aside / Vacate Default Judgment, the supporting Affidavit, and the proposed Order upon Plaintiff's counsel of record (or upon Plaintiff, if unrepresented) in accordance with Ark. R. Civ. P. 5(b), by the following method:

☐ Arkansas Court e-filing system (eFlex / CourtConnect), notice to all counsel of record
☐ U.S. First-Class Mail, postage prepaid
☐ Certified Mail, Return Receipt Requested
☐ Hand Delivery
☐ Email (by agreement / where permitted)

Addressed to:

[____________________________________]
[____________________________________]
[____________________________________]

/s/ [____________________________________]

[____________________________________]

ARKANSAS PRACTICE NOTES

• Grounds (verbatim): Under Ark. R. Civ. P. 55(c), a default judgment may be set aside for: (1) mistake, inadvertence, surprise, or excusable neglect; (2) the judgment is void; (3) fraud, misrepresentation, or other misconduct of an adverse party; or (4) any other reason justifying relief from operation of the judgment.
• Meritorious defense: Unless the judgment is void, the movant must demonstrate a meritorious defense in addition to a Rule 55(c) ground. Tyrone v. Dennis, 73 Ark. App. 209, 39 S.W.3d 800 (2001); Southern Transit Co. v. Collums, 333 Ark. 170, 966 S.W.2d 906 (1998).
• Deadline / Rule 60 interplay: A Rule 55(c) motion must be filed within a reasonable time. Separately, under Rule 60(a) the court may modify or set aside a judgment within 90 days of filing to correct error; after 90 days, relief is limited to the grounds in Rule 60(c) (which include lack of jurisdiction / a void judgment and fraud). Verify the entry date and calendar immediately.
• Void for defective service: Arkansas requires strict compliance with the service rules; a judgment entered without valid service is void for lack of personal jurisdiction and may be set aside under Rule 55(c)(2), with no meritorious-defense showing required. Common in debt cases where the consumer first learns of the suit through a garnishment ("sewer service").
• Stay collection: Request a stay of execution/garnishment under Rule 62 with the motion; ask that garnished funds be held pending the ruling.

Sources and References

• Arkansas Rules of Civil Procedure: https://opinions.arcourts.gov/ark/courtrules/en/nav.do
• Ark. R. Civ. P. 55(c) — setting aside default judgments (four grounds).
• Ark. R. Civ. P. 60 — relief from judgment, decree, or order (90-day correction; post-90-day grounds including void/jurisdiction and fraud).
• Tyrone v. Dennis, 73 Ark. App. 209, 39 S.W.3d 800 (2001) — Rule 55(c) grounds and meritorious-defense requirement: https://law.justia.com/cases/arkansas/court-of-appeals/2001/ca00-682.html
• Southern Transit Co. v. Collums, 333 Ark. 170, 966 S.W.2d 906 (1998) — setting aside default under Rule 55(c).
• Ark. Code § 16-56-111 (5-year limitation — written obligations): https://law.justia.com/codes/arkansas/title-16/subtitle-5/chapter-56/subchapter-1/section-16-56-111/
• Ark. Code § 16-56-105 (3-year limitation — oral/open account): https://law.justia.com/codes/arkansas/title-16/subtitle-5/chapter-56/subchapter-1/section-16-56-105/
• Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.: https://www.ftc.gov/legal-library/browse/rules/fair-debt-collection-practices-act-text
• CFPB — time-barred debt: https://www.consumerfinance.gov/ask-cfpb/can-debt-collectors-collect-a-debt-thats-several-years-old-en-1423/