If you have a judgement against you from a creditor, it can hurt you. Judgments can hurt in three ways: 1) They allow the creditor to use powerful collection tools against you; 2) A judgment can make you rush into bankruptcy at a bad time; and 3) Under some circumstances, a judgment can make it harder to discharge the debt in your bankruptcy. This post addresses only the first of these three.
Most creditor and collection-agency lawsuits for debt collection result in judgments against those who owe the debts. That’s because the reason for debt collection suits is to legally establish that the debt is owed, which is usually not in dispute. Also, much of the time the debtors are at the ends of their financial ropes and can’t afford an attorney to find out their options or to defend the lawsuit. So judgments are entered “by default”—meaning the deadline for the debtors to respond passed without any action by them, allowing the creditor to get a judgment. Sometimes debtors do not receive notice that a judgment has been entered against them or they receive notice and do not recognize it for what it is. Thus, many debtors do not realize there are judgments against them, especially when nothing apparently happens for months or even years afterwards. And very few people are fully aware of the possible consequences.
Most people know that a judgment gives a creditor the power to garnish wages and/or to levy against bank accounts. But preventing garnishments by keeping your bank account empty and by not being paid a regular wage often are not enough to make you “judgment proof.” For example, a judgment usually becomes a lien against any real estate you own now or will own in the future. That includes not only property held in your own name but also your rights to property held jointly with a spouse, parent, or through a trust or estate. A creditor has other tools available, including getting a judge to order you to answer questions under oath, in writing, about what you own – in New Jersey, this is called an “information subpoena”.
Beyond the direct damage a creditor with a judgment can do to you before you file your case, such a creditor can cause you problems in your bankruptcy case.
If you file bankruptcy quickly to stop a garnishment or other collection activity, you lose one of your most important advantages: the timing of your bankruptcy filing. Much of what happens in your bankruptcy case turns on exactly when it was filed. Not having the flexibility to pick the best timing can, among other things, turn a Chapter 7 into a Chapter 13, can mean a difference of many thousands of dollars, and can turn a straightforward case that meets your goals into a more complicated matter.
The lesson here is, whenever possible, take the time to see a bankruptcy attorney if you have overall financial problems, particularly if you are being sued. Try not to wait until after a judgment has been entered against you.
Photo by Dennis Wong.
Hello,
I have a question…A debt collector has told me that a judgement has been entered against me 7 yrs. ago in New Jersey Superior court. I have been out of work for many yrs. and out of state, so I didn’t even know. Capital one bank vs. me. In the letter they sent there is a Docket # (DC), but no Judgement # (DJ). I tried to look up the DC# online(NEW JERSEY COURTS), but it shows no judgement against me. How can I find out if there is a judgement without calling the debt collector??
TY,
Mel
Hi, thanks for your comment. You should contact a court clerk in the county where the judgment is located and give them the DC number (this is your docket #) and ask them whether there is a judgment against you and what date it was entered. The court is generally your best source of info on this sort of thing. There is no such thing as a judgment # in NJ – you would only get a DJ number if the case had been filed in the Law Division or if the judgment has been docketed in Trenton in an attempt to put on lien on your NJ real property (if any). DC docket numbers represent cases that were filed in Special Civil Part. Good luck. Here is general contact info for the NJ courts: http://www.judiciary.state.nj.us/njcourts-10.htm
I live in the State of MS and learned today I have a judgement against me and they are going to garnish my wages. My employer states this is from 2005, this is the first I have heard of this. Apparently it has been 7 years, can they still garnish my wages? Can I file bankruptcy to stop this?
Hello, thank you for commenting. Once you file for bankruptcy, the automatic stay arises and stops all collection efforts against you, including wage garnishments, so long as the creditors who are garnishing your wages are notified of the bankruptcy filing. Whether a creditor can garnish your wages in the first place and whether there are any statute of limitations issues depends on your state’s law. You should consult with a local bankruptcy attorney. Go to http://www.nacba.org and click on the red button that says “Search now for a bankruptcy attorney” – then plug in your zip code for a free listing of bankruptcy attorneys in your state.
I got an information subpoena today saying i must answer it in 14 days or ill be arrested. Should i ask them for proof of the debt because nothign is attached to the subpoena? They also have threatened me to take my car and sell it to auction. can they do this in nj?
Does a judgment number starting with DJ indicate a Default Judgment? Where can I find a list of judgment types. THANKS
Hi Michael, thanks for your comment. This document from the NJ Court system is directed toward creditors, but it might help you – http://www.judiciary.state.nj.us/prose/11383_ht_enforce_jdgmnt.pdf
Short answer: DJ does not mean “default judgment,” but I think it indicates a judgment that has been docketed in Trenton. To be sure, you should call the clerk of the court in the county where judgment was entered, give them your docket number, and ask them.
Hi, I lived in a house owe ex by a slumlord for 5 years, the house was bad but do to our credit we had no choise as the area was great.. Lanlord new our sitchuation and took full atvantage of is every chance she could get… Final straw was to cut down a 80′ tree in back yard for the cost of a chain saw rental…. I demanded out of least 3 mo the early.. So she took me to court I appeared to fight with slumlord proof I. Hand. But found I had to pay $187 in 3 days when I didn’t get paid for 5 days so I could not file the counter.. So a judgement was ordered against me even tough I called code enforcement and they made Lanlord completely redo everything plumbing electrical ECT! Well bottom line is A judgement for $7800 was placed against me .. When I recived it I called their lawyer and asked about payments he said that we will discuss this in future! It’s been a year and still no agreement !!! I’m worried they will either garnish my budgeted wages or bank account!! Can they do this without making or even attempting to make payment arrangements with me ? They are foreigners with nothing but money … After 7 years on different jobs in bad Economy I finally landed a great Jon and have been working for 9 months now and will be here for many years! What should I do?
Thanks
Tony
I have a judment against me, for about 2yrs now, It has been paid off, I have all my evidence that. Can this affect me in sort of not getting my ideal job? Even it’s clear that I paid it off?
I received a summons from a collector, went to court and agreed on a payment, I am still with out a job and still making the payments. I just received my payment back in the mail with a letter telling me Thanks for the payment but there is pending legal action being taken against me. Can they do this? If so I believe that it is a judgment and do I call them or wait and go to court. The only thing I have of value is a broken car that won’t run. I am trying to get a job now but they will not take me if I have a judgment.
My husband is the only one working and have no extra money each month.
Hi, thanks for your comment. You should contact an attorney as soon as possible. If you cannot afford one, call your local legal services agency. If you are in NJ, that would be LSNJ – at LSNJ.org. Good luck.