Obtaining a Default Judgment is a two-step process in Bankruptcy Court.

What “Default Judgment” Means

A “default judgment” is the kind of judgment generally entered in cases where one party fails to show up to defend a lawsuit.

Courts typically enter default judgments in favor of the plaintiffs in cases where the defendants did not respond to the complaint. Shortly after a complaint is filed, the defendant is supposed to respond to the complaint by submitting an answer or by filing a motion to dismiss. If the defendant does neither of those things, it risks entry of default and default judgment.

The 1st Step – Entering a Default

Obtaining a default judgment is a two-step process that begins with asking the clerk of the court to enter the default. This is a ministerial act of the court clerk that formally establishes that a party is in default. Once in default, a party is no longer able to answer the complaint or otherwise respond to the complaint.

Rule 7055(a) states: Entering a Default. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.

Practice Pointer: How to Request Entry of Default

Requesting an entry of default typically involves filing the following two documents with the court clerk:

• Entry of Default

• Supporting Affidavit

 The Entry of Default sets forth the request for the court clerk to enter the default of the party who has not answered the complaint or otherwise defended the action within the time required by the rules or as extended by court order.

The Supporting Affidavit sets forth the basis for the entry of default. It should include the date of service of the summons and complaint, the failure of the defaulting party to file a motion or serve a responsive pleading, and the absence of an extension of time to respond. Unless it was already filed, a copy of the proof of service of the summons and complaint should be attached as an exhibit in support of the request for entry of default.

The 2nd Step – Entering a Default Judgment

The second step is asking for entry of a default judgment that awards the relief sought in the complaint. This can be done in one of two ways.  The party seeking the default judgment can apply to the clerk of the court for entry of a default judgment. Otherwise, the request must be made by motion to the bankruptcy judge. It’s important to note that service of the motion for default judgment and notice of presentment must occur at least seven (7) days before the motion for default judgment is presented.

**The Court will strike all motions for default judgment that fail to provide sufficient notice**

Rule 7055(b)(1) Entering a Default Judgment.

(1) By the Clerk. If the plaintiff’s claim is for a sum certain or a sum that can be made certain by computation, the clerk—on the plaintiff’s request, with an affidavit showing the amount due—must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing and who is neither a minor nor an incompetent person.

Rule 7055(b)(2) Entering a Default Judgment.

(2) By the Court. In all other cases, the party must apply to the court for a default judgment.

Practice Pointer: How to Apply to the Clerk for Default Judgment

Applications for Default Judgment may be made to the clerk in only the following limited circumstances:

• Plaintiff’s claim must be for a sum certain.

• The defendant must not have appeared or otherwise participated in the action.

• The defendant must not be an infant or incompetent.

• The defendant must not be the United States or member of the armed forces.

• If there are multiple defendants, all must be in default.

The “sum certain” limitation is the most common impediment to applying directly to the clerk for a default judgment. It excludes many forms of relief commonly sought in civil litigation including, for example, injunctive and declaratory relief, unliquidated damages, punitive damages, attorneys’ fees, and prejudgment interest.

In cases where all the above criteria are satisfied, the application for default judgment consists of the following three or four documents:

• Supporting Affidavit

• Proposed Form of Default Judgment

• Bill of Costs and Disbursements

• Affidavit of Nonmilitary Service

The Supporting Affidavit should establish the basic requirements of the relevant Rule, which are (1) the entry of default by the clerk, (2) the failure of the defaulting party to appear, (3) that the defaulting party is neither an infant nor incompetent, and (4) the “sum certain” of damages being asserted and how those damages are calculated.

The Proposed Form of Default Judgment should reiterate those basic requirements and the Bill of Costs and Disbursements should set forth all costs other than attorneys’ fees unless a statute, the Rules, or court order provides that such costs are not available. In cases where the defaulting party is an individual, the application must also include the Affidavit of Nonmilitary Service and supporting certifications from the various military services.

If all the requirements of the relevant Rules have been satisfied, the clerk will enter the default judgment against the defaulting party.

Practice Pointer:  Motions Before Bankruptcy Judges for Default Judgment

Bankruptcy court judges have authority to enter a default judgment against a party in default on their own initiative or in response to a motion filed by the non-defaulting party.

Like applications to the clerk, motions for a default judgment must be supported by evidence establishing the requirements of the relevant Rules and the amount of damages requested.

Unlike applications to a clerk, however, motions for a default judgment may be denied even if the movant has complied with the technical requirements of the Rules. That is because motions for default judgment are discretionary and subject to a range of considerations that may impact the outcome. For example, if the party in default filed an appearance, the Rules require that the movant provide the defaulting party with at least seven days’ notice of the motion. Special weight is given to the notice requirement in such circumstances.

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