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How Can My Small Business Avoid a Default Judgment?

Posted by Jonathan Krems | Nov 25, 2021 | 0 Comments

In this week's Freedom Friday blog and email newsletter, I want to do something a little different than what I usually do in the Freedom Friday blogs and email newsletters.  Normally each week I take time to answer a frequently asked question by clients or prospective clients.  This week, I want to answer a question which I do not get asked very often, but honestly, this is a question that I should be asked much more often, and that's “How Can My Small Business Avoid a Default Judgment?” or, “What should I do if my small business gets sued?”

If your small business gets sued, time is of the essence.  Oklahoma law provides that a written “Answer” must be filed in response to the lawsuit within twenty (20) days of service, or otherwise a default judgment can be rendered against your small business.  In today's Freedom Friday blog and email newsletter, I want to give you three (3) steps you should take if your small business gets sued, to avoid a default judgment.

1.  Get a Lawyer Fast

The first step you should take if your small business gets sued, to avoid a default judgment, is to get a lawyer fast.  When I say fast, I mean fast, as soon as possible.  You might be asking, “Why do I need to hire a lawyer?  I can do this myself, right?”  No, Oklahoma law does not allow you as a small business owner to represent your small business in Court, unless you also happen to be an attorney.  If you're not an attorney, and your small business is an LLC, you need to hire an attorney to represent and defend your small business in Court.  You also have a very short time period to have a written response filed to the lawsuit.  That written response is called an “Answer,” but only an attorney can draft an Answer on behalf of your small business, and that has to be done within twenty (20) days of service.  Otherwise, your small business can get a default judgment, and that isn't good at all.

2.  Maybe Call Your Insurance Carrier

The second step you should take if your small business gets sued, to avoid a default judgment, is to maybe call your insurance carrier.  Now, you might be asking, “Why maybe?”  It really depends on the type of case which your small business has been sued with, but some lawsuits are best handled by an attorney hired by your insurance carrier.  If someone sues your small business over a slip and fall, an injury, or any case involving what is called “negligence,” then often these cases are covered by your commercial general liability insurance carrier, and they have attorneys on standby who are ready to defend your small business.  If your small business gets sued over one of these types of cases, you won't have to pay for your lawyer, because your insurance company will.  So, if that's why your small business was sued, you need to call your insurance carrier right away.

3.  Gather As Much Documentation As Possible

The third step you should take if your small business gets sued, to avoid a default judgment, is to gather as much documentation as possible.  If you've been sued over breach of contract, or anything regarding a transaction, you need to gather as much documentation as possible regarding the transaction.  Your attorney will be asking you for this documentation, so keep it handy.  This documentation will need to be reviewed by your attorney to prepare the defense of your case.

Many small businesses get sued every year for all sorts of reasons.  Unfortunately, many of them do not respond to the lawsuits and those cases get default judgments.  This is especially true with lawsuits involving credit card debts and breaches of contract.  If your small business gets sued, contact a lawyer as soon as possible to avoid a default judgment against your small business.

If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/

About the Author

Jonathan Krems

Jonathan is the Founder and Managing Attorney of Liberty Legal Solutions, LLC, a law firm dedicated to building, protecting, and defending the business and personal interests of our clients in Oklahoma.  Jonathan's primary practice areas are business law, contracts and agreements, business liti...

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