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.