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

STATE OF VERMONT — SUPERIOR COURT, [____________] UNIT, CIVIL DIVISION

Docket No. [____________]

DEFENDANT'S MOTION TO SET ASIDE / VACATE DEFAULT JUDGMENT

Filed Pursuant to V.R.C.P. 55(c) and 60(b)

NOW COMES the Defendant, [____________] ("Defendant"), appearing [☐ self-represented / ☐ 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 Vermont Rules of Civil Procedure 55(c) and 60(b). 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 promptly upon learning of the judgment.

3. Vermont policy strongly favors the resolution of disputes on their merits. Rule 60(b) is to be liberally construed to accomplish justice, and doubts are generally resolved in favor of reaching the merits.

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 $[____], court costs $[____]].

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

☐ A wage trustee process / garnishment served on Defendant's employer
☐ A bank trustee process, levy, or freeze of Defendant's account
☐ A post-judgment financial-disclosure or examination notice
☐ A credit report entry
☐ Other: [____________]

7. Defendant files this motion [____] days after first learning of the judgment, which is within a reasonable time and within the applicable limit under [☐ Rule 60(b)(1)-(3) (within one year of entry) / ☐ Rule 60(b)(4) (void) or 60(b)(6) (reasonable time)].

III. LEGAL STANDARD

8. Rule 55(c). The court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b). V.R.C.P. 55(c).

9. Rule 60(b) — grounds for relief. On motion and upon such terms as are just, the court may relieve a party from a final judgment, order, or proceeding for: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial; (3) fraud (whether intrinsic or extrinsic), misrepresentation, or other misconduct of a party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; or (6) any other reason justifying relief from the operation of the judgment. V.R.C.P. 60(b).

10. Timing. A Rule 60(b) motion shall be made within a reasonable time, and for grounds (b)(1), (2), and (3) not more than one year after the judgment was entered. A motion on the ground that the judgment is void (b)(4), or under (b)(6), requires only filing within a reasonable time.

11. A judgment without valid service is void. A court acquires personal jurisdiction only through valid service of process under V.R.C.P. 4. A default judgment entered when the defendant was not properly served is void for lack of personal jurisdiction and must be set aside under Rule 60(b)(4); for a void judgment the court has no discretion to do otherwise. V.R.C.P. 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 as required by V.R.C.P. 4. Specifically: [describe — e.g., "Defendant did not live at the address where service was attempted," "the return reflects service on a person not authorized or not residing there," "no one personally delivered the papers to Defendant," "Defendant first learned of the suit only through the trustee process"]. Because the Court lacked personal jurisdiction, the judgment is void and must be vacated. V.R.C.P. 60(b)(4).

☐ B. Mistake, inadvertence, surprise, or excusable neglect. Defendant's failure to respond resulted from excusable neglect and not culpable conduct, in that: [describe — e.g., "Defendant was hospitalized," "the papers were misdelivered or received late," "Defendant reasonably believed the matter had been disputed/resolved with the collector," "Defendant did not understand the deadline"]. V.R.C.P. 60(b)(1).

☐ C. Fraud, misrepresentation, or misconduct. The judgment was obtained through fraud, misrepresentation, or other misconduct of Plaintiff or its agents, including [describe — e.g., "a false affidavit or 'sewer service' return of service," "misrepresentation of the amount owed," "concealment of the lack of any assignment"]. V.R.C.P. 60(b)(3).

☐ D. Newly discovered evidence. Defendant has discovered evidence that could not, with reasonable diligence, have been discovered earlier, namely: [describe]. V.R.C.P. 60(b)(2).

☐ E. Any other reason justifying relief. [Describe.] V.R.C.P. 60(b)(6).

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

V. DEFENDANT HAS A MERITORIOUS DEFENSE

12. Defendant is prepared to present one or more meritorious, fact-supported defenses that, if proven, would constitute a complete or substantial defense to Plaintiff's claim. Defendant asserts the following:

☐ Statute of limitations. The alleged claim may be time-barred. Section 511 is a general six-year civil-action period that applies only except as otherwise provided and runs after the cause of action accrues. Identify the exact claim and instrument, any more specific period, the governing accrual rule, the filing date, and all tolling, payment, acknowledgment, promise, and transition facts before pleading this defense. 12 V.S.A. § 511.

☐ Acknowledgment, promise, or payment. Section 591 requires an acknowledgment or promise relied on to affect a Chapter 23 defense to be in a writing signed by the affected party. Section 592 separately preserves the effect of a principal or interest payment and limits when an indorsement or memorandum is sufficient proof of payment. Do not treat a payment as ineffective merely because the acknowledgment-or-promise writing rule was not met. 12 V.S.A. §§ 591-592.

☐ 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. [Attach FTC Identity Theft Report / police report as Exhibit [__].]

☐ Wrong amount. The judgment amount is incorrect, inflated, or includes unauthorized interest, fees, or charges. 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; Plaintiff is not the real party in interest.

☐ Potential separate FDCPA claim—not by itself a defense that the debt is invalid. If a qualifying debt collector failed to provide the notice or verification required by 15 U.S.C. § 1692g, Defendant may have a separate civil claim under 15 U.S.C. § 1692k. A formal pleading is not an “initial communication” under § 1692g(d). Plead such a claim only if procedurally permitted, and evaluate any state-law issue separately.

☐ Other meritorious defense: [____________]

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

VI. NO UNFAIR PREJUDICE TO PLAINTIFF; CONDUCT NOT CULPABLE

14. No unfair prejudice. Setting aside the judgment will not unfairly prejudice Plaintiff. Plaintiff retains its evidence and its claim; only the opportunity for a one-sided judgment is lost. Defendant is prepared to proceed promptly.

15. 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], not from any deliberate disregard of the Court's process.

VII. DEFENDANT'S AFFIDAVIT

STATE OF VERMONT )
COUNTY OF [____________] )

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

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

2. I was never properly served with the summons and complaint. [State facts: where you lived on the date of attempted service; whether you ever 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 subject to trustee process" / "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 account is not mine, the amount is wrong, the debt was discharged, or the dated claim/accrual/payment facts support a limitation defense after legal review].

5. My failure to respond 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 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

16. Defendant requests that the Court stay execution on the judgment — including any wage trustee process, bank trustee process, levy, or other post-judgment process — pending the Court's ruling on this motion. V.R.C.P. 62. Absent a stay, Defendant faces immediate and irreparable harm from the seizure 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.

17. Defendant further requests that any funds already taken by trustee process or levy be held by the trustee 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, trustee process, levy, and other post-judgment collection proceedings pending the Court's ruling, and order that any funds already taken be held and not disbursed;

C. QUASH any outstanding trustee process or writ of 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. Having considered the motion, the supporting affidavit, any response, and the applicable law, including V.R.C.P. 55(c) and 60(b), the Court finds good cause and that the motion should be GRANTED.

IT IS THEREFORE ORDERED that the default judgment entered on [__/__/____] is SET ASIDE and VACATED; all trustee process, levies, and executions on that judgment are QUASHED and STAYED, and any funds already taken shall be returned to Defendant; and Defendant is granted leave to file an Answer within [____] days of this Order.

SO ORDERED this ____ day of __________, 20____.

_________________________________
Superior Court Judge

XI. SIGNATURE

DATED at [City], Vermont, this [____] day of [____________], 20[____].

/s/ [____________________________________]
[____________________________________]
☐ Defendant, self-represented ☐ Attorney for Defendant
Vermont Bar No. (if attorney): [____________]
[Street Address]
[City], Vermont [____]
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 V.R.C.P. 5, by the following method:

☐ Vermont Judiciary electronic filing system (Odyssey File & Serve), notice to all parties of record
☐ U.S. First-Class Mail, postage prepaid
☐ Email (by agreement / where permitted)
☐ Hand Delivery

Addressed to:

[____________________________________]
[____________________________________]
[____________________________________]

/s/ [____________________________________]
[____________________________________]

VERMONT PRACTICE NOTES

• Deadline: A V.R.C.P. 60(b) motion must be made within a reasonable time and, for grounds (b)(1) (mistake/excusable neglect), (b)(2) (newly discovered evidence), and (b)(3) (fraud), not more than one year after entry. A void-judgment motion under (b)(4) and a (b)(6) motion need only be within a "reasonable time" (note: courts increasingly require even void-judgment motions to be filed within a reasonable time — do not delay). Verify the entry date and calendar immediately.
• Two-document rule: Rule 55(c) lets the court set aside an entry of default for good cause and set aside a default judgment under Rule 60(b). Confirm which has been entered.
• Void for defective service: A judgment entered without valid service is void for lack of personal jurisdiction (Rule 60(b)(4)); the court must set it aside. Common in debt cases where the consumer first learns of suit through a trustee process ("sewer service").
• Small Claims: If the case was filed on the Small Claims docket, a separate set of procedures and forms applies; confirm the docket before using this Superior Court Civil Division form.
• Stay collection: Request a stay of execution/trustee process under Rule 62 with the motion; ask that funds already taken be held pending the ruling.
• Attach the proposed Answer: Many judges expect the proposed responsive pleading to accompany the motion so the case can proceed immediately if relief is granted.

Sources and References

• Vermont Rules of Civil Procedure: https://www.vermontjudiciary.org/about-vermont-judiciary/rules
• V.R.C.P. 55 — Default; Default Judgment; Setting Aside (good cause; Rule 60(b)): https://www.vtcourts.gov/sites/default/files/documents/PROMULGATEDVRCP%2055%20and%2080.1.pdf
• V.R.C.P. 60(b) — Relief from Judgment or Order (reasonable time; 1-year limit for (b)(1)-(3)).
• 12 V.S.A. § 511 (general civil-action period; exceptions and accrual control): https://legislature.vermont.gov/statutes/section/12/023/00511
• 12 V.S.A. §§ 591-592 (acknowledgment, promise, payment effect, and proof): https://legislature.vermont.gov/statutes/section/12/023/00591
• Vermont Consumer Protection Act, 9 V.S.A. ch. 63 (§§ 2453, 2461): https://legislature.vermont.gov/statutes/chapter/09/063
• 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/