Default Judgment
A court ruling issued against a defendant who fails to respond to or appear in a lawsuit, often resulting in an automatic loss without the case being argued on its merits.
If a business is sued and doesn’t file a timely response, a court can enter judgment automatically in favor of the other party, which is part of why responding promptly to any legal notice, rather than ignoring it, is critical.
A default judgment can lead directly to a judgment lien against business assets, making it one of the more serious and avoidable outcomes in a financing dispute.
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