Category Archives: judgments

Understanding the New Jersey Courts’ Debt Collection System: A Guide for Consumers

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If you’re facing debt collection in New Jersey, understanding how the state’s courts handle these cases is crucial. The debt collection process can be intimidating, but knowing your rights and the legal procedures involved can help you navigate the situation more confidently.

Overview of the Debt Collection Process in New Jersey

When you owe a debt and fail to make payments, creditors may take legal action to recover the money. In New Jersey, this process typically begins with the creditor filing a lawsuit in the appropriate court. Here’s a step-by-step overview of how the debt collection system works in New Jersey courts:

1. Filing a Complaint

The debt collection process starts when a creditor, or a debt collection agency acting on behalf of the creditor, files a complaint with the court. The complaint outlines the amount owed, the reason for the debt, and the legal basis for the claim. The creditor may also include any interest or fees that have accrued.

In New Jersey, most debt collection cases are handled in the Special Civil Part of the Superior Court if the amount owed is less than $20,000. For larger amounts, the case may be filed in the Law Division of the Superior Court.

2. Receiving a Summons

Once the complaint is filed, the court issues a summons, which is a legal document notifying you that a lawsuit has been initiated against you. The summons will include important information such as the date by which you must respond to the complaint, the court where the case has been filed, and the details of the creditor’s claim.

3. Responding to the Complaint

After receiving the summons, you typically have 35 days to file an answer with the court. In your answer, you can admit or deny the allegations in the complaint, and you may also assert any defenses you have. Common defenses include disputes over the amount owed, identity theft, or the debt being beyond the statute of limitations.

Failing to respond to the complaint within the given timeframe can result in a default judgment against you. This means the court automatically rules in favor of the creditor, allowing them to pursue further collection actions.

4. Default Judgment

If you do not respond to the summons, the creditor may request a default judgment from the court. A default judgment gives the creditor the legal right to collect the debt through various means, including wage garnishment, bank account levies, and property liens.

5. Attending Court Hearings

If you file an answer disputing the debt, the case may proceed to a pre-trial conference or a court hearing. During the hearing, both you and the creditor will have the opportunity to present evidence and arguments. The judge will then decide whether the debt is valid and, if so, how much you owe.

6. Judgment and Collection

If the court rules in favor of the creditor, a judgment will be entered against you. This judgment is a formal decision stating that you owe the debt. The creditor can then use this judgment to collect the debt through various methods:

  • Wage Garnishment: The creditor can obtain a court order to deduct a portion of your wages directly from your paycheck.
  • Bank Account Levy: The creditor can freeze and seize funds from your bank account up to the amount of the judgment.
  • Property Liens: The creditor can place a lien on your real estate, which means they have a legal claim against your property. This can prevent you from selling the property until the debt is paid.

7. Satisfaction of Judgment

Once the debt is paid in full, the creditor must file a Satisfaction of Judgment with the court. This document officially acknowledges that the debt has been settled. It’s important to ensure that this document is filed to clear the judgment from your record.

8. Options for Contesting a Judgment

If a judgment is entered against you, you still have options. You can file a motion to vacate the judgment if you believe it was entered in error or if you have new evidence. However, this must be done promptly, and you may need to provide a valid reason for not responding to the original complaint.

9. Statute of Limitations on Debt Collection

In New Jersey, the statute of limitations for most debt collection cases is six years from the date of the last payment or when the debt became due. If a creditor files a lawsuit after this period, you can raise the statute of limitations as a defense, which may result in the case being dismissed.

10. Understanding Your Rights

New Jersey’s debt collection laws provide several protections for consumers. For example, the New Jersey Consumer Fraud Act prohibits deceptive practices by debt collectors, and the Fair Debt Collection Practices Act (FDCPA) offers protections against harassment and unfair collection methods.

Final Thoughts

Facing a debt collection lawsuit in New Jersey can be stressful, but understanding the process and your rights can help you take the necessary steps to protect yourself. If you’re unsure about how to proceed, consulting with a qualified attorney who specializes in debt collection cases can provide you with the guidance you need.

By being informed and proactive, you can better navigate the debt collection system in New Jersey’s courts and work towards resolving your financial challenges.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

New Jersey Judgments: A Basic Guide

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A judgment in New Jersey is a court order requiring a party (the debtor) to pay a sum of money to another party (the creditor). It’s essentially a legal pronouncement that one party owes the other, enforceable by the court.

Understanding how judgments work in New Jersey can be crucial, whether you’re facing a potential judgment against you or trying to collect on one yourself. Here’s a breakdown of the key elements:

Types of Judgments:

  • Money Judgments: These are the most common, ordering the debtor to pay a specific amount of money. (Think unpaid credit card bills or breach of contract damages.)
  • Non-Money Judgments: These require the debtor to perform a specific action, like returning stolen property or complying with a contract term.

The Judgment Process:

  1. Lawsuit: The creditor files a lawsuit against the debtor in the appropriate court.
  2. Trial or Settlement: The case goes to trial or the parties reach a settlement agreement.
  3. Judgment Issued: If the creditor wins, the court issues a judgment in their favor, specifying the amount owed by the debtor.

Collecting on a Judgment:

Once a judgment is in place, the creditor can take various steps to collect the debt, including:

  • Wage Garnishment: Court order requiring the debtor’s employer to withhold a portion of their wages and pay it directly to the creditor.
  • Bank Levy: Court order to freeze and seize funds in the debtor’s bank accounts.
  • Property Lien: Placing a legal claim against the debtor’s real estate or other property, potentially leading to foreclosure or repossession if the debt isn’t paid.

Important Things to Remember:

  • Judgments in New Jersey remain valid for 20 years and can be renewed for another 20 years.
  • Debtors have certain rights, including the ability to appeal the judgment or file for bankruptcy protection.
  • There are exemptions that protect certain assets from being seized to satisfy a judgment, such as a primary residence and personal belongings up to a certain value.

Seeking Legal Help:

Navigating the complexities of judgments can be daunting. If you are facing a judgment or have questions about collecting on one, seeking assistance from a qualified New Jersey attorney is highly recommended.

Additional Resources:

Remember: Knowing your rights and understanding the legal process empowers you to navigate the landscape of New Jersey judgments with confidence.

I hope this information provides a helpful overview of New Jersey judgments. Please note that this is not a substitute for professional legal advice.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

The Bankruptcy Automatic Stay in New Jersey: How It Affects Debt Collection and State-Court Judgment

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Introduction: When facing overwhelming debt, bankruptcy can provide a lifeline for a fresh financial start. However, many individuals wonder how bankruptcy affects debt collection, especially in the context of New Jersey state court judgments. In this article, we will explore the bankruptcy automatic stay and its particular impact on debt collection, with a special focus on state-court judgments in New Jersey.

Understanding the Bankruptcy Automatic Stay:

Before we delve into the specifics of New Jersey, let’s first understand the bankruptcy automatic stay, a fundamental concept in bankruptcy law.

The automatic stay is a powerful provision that goes into effect the moment an individual or business files for bankruptcy. It prevents creditors from taking any actions to collect debts or seize assets during the bankruptcy proceedings. This temporary halt on collection efforts provides immediate relief to debtors and allows them to work toward a fresh financial start.

The Impact on Debt Collection:

The automatic stay affects various aspects of debt collection, including:

  1. Creditor Harassment: Creditors are prohibited from making collection calls, sending demand letters, or engaging in other harassing actions during the automatic stay.
  2. Wage Garnishments: The automatic stay stops wage garnishments – a common post-judgment debt-collection technique – providing debtors with the opportunity to use their income for essential living expenses.
  3. Bank Levies: It prevents creditors from freezing or seizing funds in a debtor’s bank account – this is another debt-collection method that is a common result of state-court judgments.
  4. Foreclosures and Repossessions: The automatic stay temporarily halts home foreclosures, car repossessions, and other property seizures.
  5. Legal Proceedings: If a creditor has initiated a lawsuit, the automatic stay suspends the legal process, offering debtors some breathing room. Here is an example of an order to halt all lawsuits against a large corporate bankruptcy debtor.

Conclusion:

The bankruptcy automatic stay can be a valuable tool for individuals seeking relief from debt collection efforts. However, its impact on state-court judgment debt collection, especially in New Jersey, can be influenced by various factors. To fully comprehend your specific situation and explore the best course of action, consult with a knowledgeable bankruptcy attorney in your area. Keep in mind that while bankruptcy offers relief, it’s essential to weigh the consequences and implications carefully before proceeding.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.

There’s a Judgment Against Me – What Are My Options?

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Many people face civil judgments for debt collection. Here’s a guide to your options for addressing this problem.

What is a Debt-Collection Judgment?

A debt-collection judgment is basically a court order signed by a judge stating that you owe the plaintiff, who may be the original creditor or a debt collector, a specific sum of money. The judgment may or may not say that you owe continuing interest and/or attorney fees to the plaintiff.

How Do I Know if There’s a Judgment Against Me?

Typically, you would have been served with legal papers – a lawsuit – at some point. You may or may not have chosen to handle the lawsuit somehow, either by contacting the other side’s attorneys yourself or by getting your own attorney. Or maybe you ignored it. If a judgment was entered, you should have received a copy of the judgment itself or some notification that a judgment was entered against you, along with some indication of how much money the judgment was for.

If you were not served with any legal papers, it’s possible that you might have missed them in the mail somehow – some courts allow for service by mail, under certain circumstances – or maybe you’ve moved over the last few years. Try looking on the court’s website to see if you can locate a lawsuit against you. If you find one, make a note of the county in which it was filed, the plaintiff’s name, and the court’s docket number. These pieces of information will come in handy if you need to call an attorney or the court clerk.

If you knew about the lawsuit early on and you settled it with the plaintiff’s law firm, you might be required to make payments on the debt over time. In that case, there should not be a judgment against you, at least not if the debt-collection lawsuit took place in New Jersey. A debt-collection settlement is not the same as a debt-collection judgment in the New Jersey civil court system.

There’s a Judgment Against Me – What Are the Risks?

If there is a debt-collection judgment against you in New Jersey, you face some potential problems. The most likely issues are the following:

  • Wage garnishment: Only a certain percentage of your wages can be garnished, but it might be more than you can afford;
  • Bank levy: This is the most dangerous, in my opinion, because the plaintiff can get up to the full amount of the judgment at one time – meaning that your bank account could be cleared out; and/or
  • Lien on real estate: If you own property in New Jersey, the plaintiff could have a lien placed on it, which means that, when you sell the property, the plaintiff will have to be paid from the sale proceeds.

I Can’t Afford to Pay the Judgment (Or the Settlement) – What Now?

If there is a debt-collection judgment against you and you can’t afford to pay it, you have a few options:

  • Do nothing: Let it get paid through one of the judgment collection methods listed above;
  • Settle it: You can settle a judgment, although it’s not likely to be on great terms – try settling it yourself, or if it’s for a high dollar amount, you might want to pay an attorney to settle it for you;
  • File for bankruptcy: Get a free bankruptcy consultation and tell the attorney as many details about the judgment as possible. Most debt-collection judgments are dischargeable in bankruptcy. Provide information about all of your debts, income, and assets with the bankruptcy attorney and see if you qualify.

If you’d like to discuss your debt situation, book a phone consultation now by scheduling it on my calendar.

The #1 Best Judgment Protection: Bankruptcy

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The #1 best judgment protection is bankruptcy. If you can qualify for a bankruptcy and you’re considering whether to file a bankruptcy or do debt settlement instead, consider the issue of judgment protection. Does bankruptcy protect me from judgments? Some think that hiring a debt consolidation (aka debt settlement) company provides the same level of protection as a bankruptcy.

But if you believe that a debt consolidation or a debt settlement company can protect you in any way, shape or form from debt collectors and their tactics, you’re wrong. It’s that simple. Bankruptcy can protect you from judgments and from debt collection. How does bankruptcy provide protection from judgment collection?

The Automatic Stay

Bankruptcy protections from debt collection activities come through the automatic stay. The automatic stay has the effect of a court order stopping all attempts to collect a debt from you, the debtor, during the course of your bankruptcy case. This is the biggest, most important difference between bankruptcy and debt settlement.

Bankruptcy Automatic Stay Protection vs. Debt Settlement

Whether you are settling your own debts or you’ve hired someone else to settle your debts, you need to know that no part of the debt-settlement process protects you from any type of debt collection at all. Many people believe that if they’ve hired an attorney to settle their debts, or if the debt settlement company assigns an attorney to their case, that they will get some type of protection from debt collection activities such as lawsuits, wage garnishments, or bank levy. Nothing could be further from the truth.

The reason that you don’t get any protection from debt collection through debt settlement is simply because the debt collector doesn’t have to stop trying to collect. There’s nothing to stop them.

Debt Settlement’s False Security

Federal law does require debt collectors (but not original creditors) to stop calling you on the phone if you’ve told them that you have an attorney, which gives people a false sense of security. You may falsely believe that, because the debt collector is no longer calling you, they won’t sue you or try to collect on an existing judgment. Again, it’s not true – you can be sued, you can have your wages garnished, and your bank account can be levied.

To be sure, debt collection law firms often will verbally agree to temporarily suspend collection activity while your attorney is discussing settlement with them, but there is no requirement that they do so. If settlement talks fall apart, debt collection activity will resume.

Limits Of The Automatic Stay

It’s important to know that the bankruptcy automatic stay has limits. First of all, the automatic stay only last as long as your bankruptcy case lasts. If you receive a bankruptcy discharge of your debts, you will be protected from collection on the discharged debts by the discharge order itself. The bankruptcy discharge takes the form of a court order that creditors and debt collectors must obey.

Further limits of the bankruptcy automatic stay can result from multiple bankruptcy filings within a short period of time. For example, if you filed a bankruptcy case that was dismissed and then you file another bankruptcy case within a year, your automatic stay will be limited to 30 days only, unless a judge grants your formal, written request to extend the stay. And it’s possible to have no automatic stay at all if you have filed too many bankruptcy cases in a year.

If you have questions about judgment protection, debt settlement, debt consolidation, or the bankruptcy automatic stay, call to schedule a free bankruptcy phone consultation with attorney Jennifer Weil at (201) 676-0722, or go to my Setmore page.

How New Jersey Debt-Collection Judgments Work

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If you’ve been sued for credit-card debt in New Jersey and you’re trying to decide what to do, you will need to know how New Jersey debt-collection judgments work.

Pay Attention To The Lawsuit Timeline

If you’ve been sued for debt collection in New Jersey, you should pay close attention to the timeline. Look closely at the papers you received – the first papers, the ones that start a lawsuit, are the summons and the complaint. The summons should be on the front. It may look like a mostly pre-printed form that has been filled in here and there. In some kinds of lawsuits, you will see a date somewhere in the middle of that form that is the date your written answer is due. In other kinds of lawsuits, there won’t be a date in the middle of the summons.

Which Part Of The Court Is The Lawsuit In?

The two main kinds of debt-collection lawsuits in New Jersey are those that are filed in Special Civil Part and those that are not. Ways to tell the difference is that in Special Civil Part lawsuits: 1) The plaintiff will be seeking $15,000 or less (it could be a little more with attorney fees added on); 2) The docket number will have “DC” in it; 3) The upper right-hand corner of the complaint will have “Special Civil Part” in the name of the court.

Special Civil Part vs. Law Division

Most credit-card debt-collection lawsuits that are not in Special Civil Part are situated in regular Law Division. You’ll need to look closely at the papers you receive, since the Special Civil Part lawsuits will say “Law Division” on them, but if they also say “Special Civil Part,” that means they’re not in the regular Law Division. Regular Law Division lawsuits seek to collect more than $15,000 and their docket numbers have “L” in them instead of “DC”.

Small Claims Part

Note that yet another category of lawsuit in this area could be small claims lawsuits, which have “SC” in the docket number, but this type isn’t typically used for credit-card debt collection. Small claims lawsuits typically less than $3,000 in dispute, most often involving parties who are not represented by attorneys.

Why It Matters Which Part The Lawsuit Is In

The reason it’s important to distinguish Special Civil Part collection lawsuits from regular Law Division lawsuits is that the procedure for obtaining a judgment against the defendant is a little different for each type of lawsuit.

Service Of Special Civil Part Lawsuits

As mentioned above, the first thing that happens in Special Civil Part lawsuits is that each defendant receives service of the Summons and the Complaint, usually by mail from the courthouse. The documents are sent via both certified mail, return receipt requested and regular mail. If both of these pieces of mail are returned to the court, service was not good. If at least one of them does not get returned, the court deems that as good service.

So if you’re trying to dodge service, it doesn’t do you any good to ignore the certified mail that’s waiting for you at the post office.

What Happens If You Don’t Respond

You’ll get 35 days – until the date listed on the front middle portion of the Summons – to file your written answer to the court along with proper payment of the filing fee and to send a copy to the other side. If you don’t file the answer by the answer date, the Special Civil Part automatically “enters default” against you. All this means is that the court is recognizing that you did not file a timely answer.

How New Jersey Debt-Collection Judgments Work

Then, after the court enters default against you, the other side (the plaintiff) can file a request or a motion to enter judgment against you for the full amount of money that they are seeking to collect.

You might receive a copy of this request or motion or you might not, depending on circumstances. The timing here is almost entirely dependent on the efficiency of the attorney representing the plaintiff. Some attorneys get these papers in to the court on the first possible date and some attorneys let the case lapse for 6 months or more. Most fall somewhere in between. It can help to know the practices of the various attorneys’ offices.

What If Nothing Happens?

If the case lapses for 6 months with no judgment, the court will administratively dismiss the case. That doesn’t mean you win. Administrative dismissal only means the court wants to get the case off its active rolls as quickly as possible. The other side can always file a motion to revive the case.

How New Jersey Debt-Collection Judgments Get Collected

Once the other side gets its judgment, they can start filing motions with the court to allow them to collect on the judgment, usually via wage garnishment or bank levy.

How Law Division Differs

If the case is in regular Law Division, the procedure is similar, but not exactly the same. The main difference is that the other side must file papers with the court asking it to enter default against you, declaring that you did not timely file a written answer.

Then, once they get their entry of default, the rest of the procedure is the same – the other side files papers requesting a judgment against you. And once the judgment is entered, they can start trying to collect.

What To Do When You Get A Lawsuit

Once you receive a lawsuit, you should start paying close attention to the timeline outlined above. Seek attorney help as soon as possible, either to help you file a written answer and continue defending against the lawsuit, or to settle it, or maybe even both. You’ll need to provide an attorney with a full copy of the papers and tell them everything you think you might know about the underlying facts of the lawsuit.

If you’ve been sued in New Jersey and you need help, call (201) 676-0722 to schedule a free telephone consultation with attorney Jennifer Weil, or go to my Setmore page.