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?
If you collect debts in Texas you better watch out for the Texas Fair Debt Collection Act.
i have a court date this week 06/05 from a debit collector in the $2,500 cash call loan. now owed my a Law firm=collection agancey.
i tried to make arrangements of $25.00 per month they refused to accept.
I lost my job after 25 years.
My new job I’m 1099 contract employee
questions are
the judge accept my repayment program, will i have judgement against me
can they garnish my wages if I’m 1099 self employeed?
they do have my bank information if i lose in court can they get into my bank account?
Pressler and pressler is garnishing my wages for the third time. $1000-$3000. 3 liens are on my credit report. I feel as if they are going to continue this method ongoing. Was wondering if filing for bankruptcy may be a better option. Was out of work when the bills accumulated. Now just making ends meet.
Thanks for your comment. If you’re in NJ, feel free to call me for a bankruptcy consultation to explore your options. (201) 676-0722.
I have a judjement lein that was filed against my property. I received a sealed copy of the judjement
document from the new jersey court. I would like to know where i have to go to pay off the the money on the lein. thank you.
Hi, thanks for the comment. You may wish to start off by calling a court clerk in the courthouse where the judgment was entered. They may be able to direct you to the right people to contact. Have your docket number handy when you call. Or, you may wish to contact a lawyer and bring them all of the documentation to examine so they can properly advise you.
My employer got a thing in the mail about gsainrhing my wages from a law firm. I have not received nothing in mail. Can a law firm garnish my wages without going through court?
Ask your employer for a copy of what they received; it should contain contact information for someone. Start there, keep digging, and see where that leads. It may be possible to have a judgment against you without knowing that you’ve been sued.
im my grandmother care giver and care taker i had the sheriff come here and tell me they put a levy against my grandmother house for 1,900 dollars which this is the first time me hearing about this my grandmother is 73yrs old with dementia so how can they do that if she is not competent to understand anything or to stand trial what can i do to help her
Sounds like you may need to seek legal help for her; try your local legal services office. In NJ, this would be LSNJ.
I have gotten a couple of letters from out of state with just a law firm from South Dakota, postmarked from Arizona claiming a Judgement and Bank levy for some credit cards 5 years ago. I received no notice of any court action or suite against me. For anything to be valid it has to be filed in NJ or at least I would receive some official notification right? I may be near having to file bankruptcy son but am trying to hold off while members in my family graduate from college.
Thanks for your comment. It all depends on the specifics of your case. Feel free to give me a call for a free telephone bankruptcy consultation.