We are a MI S corp... a home-based business with just me and my wife. We were served with court papers a while back. My wife mistakenly thought that no action was needed. We have since received a default judgement in the amount of $9500. I am sick to my stomach and worried that our accounts are going to be attached. We do owe the money and have previously offered what we thought was a reasonable arrangement only to be hit with this. HELP!!

You need to file a motion to vacate the judgement. You can try explaining that you misunderstood what action was required. But this is only a delaying action. If you acknowledge owing the money, you need to try and reach a payment arrangement immediately. Get it in writing and make sure they agree to withhold any garnishment as long as you adhere to the agreement.