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Scura, Wigfield, Heyer, Stevens & Cammarota Blog

Debt Collection Techniques to Be Aware of Once a Judgment Is Entered Against You

[fa icon="clock-o"] September 11, 2017 [fa icon="user"] David E. Sklar [fa icon="folder-open'] Debt Management

debt collection lettersIf you have a judgment that has been entered against you, then you may be feeling terrified about the next steps that a creditor may take to collect their judgment.  Many questions may race through your mind as to what will happen next.  This blog will explore post-judgment collection techniques used by creditors.

Court Enters Judgment Against You.  What’s Next?

Once a judge enters a monetary judgment against you in the State of New Jersey, the judgment-creditor’s next steps are generally to get the judgment recorded in Trenton and to obtain a writ of execution.   The effect of recording a judgment in Trenton is to give the judgment-creditor a statewide lien on all real property of the judgment-debtor.  The writ of execution grants authority to the sheriff to levy on property of the judgment-debtor towards satisfaction of the judgment debt. 

Common Collection Techiniques For Personal Property

Common collection techniques that judgment-creditors engage in include wage garnishments and levies on bank accounts.  For a judgment-creditor to garnish your wages, they will have to file a motion to obtain court approval to garnish a percentage of your wages. Once the judgment-creditor obtains court approval for the wage garnishment, a portion of your wages will be deducted from your pay check towards satisfaction of your judgment debt. 

When a creditor levies on your bank account, then the levied funds will be frozen pending the creditor filing a motion for turnover of the levied funds.  Up until the order for turnover of the funds is entered, the funds are technically still the judgment-debtor’s property.  However, once the order is entered, the judgment-debtor’s property rights are extinguished and the levied funds become the property of the judgment-creditor.

Levying Real Property

In order to levy on real property and eventually sell real property belonging to a judgment-debtor, a judgment-creditor must establish that they have exhausted the judgment-debtor’s personal property towards satisfaction of the judgment or that the judgment-debtor’s personal property is insufficient to satisfy the judgment.  The judgment-creditor must move before the Court for an order granting permission to levy on real property prior to levying on real property.  Once the judgment-creditor successfully levies on real property, then that judgment-debt becomes secured against that real property.  Also, the levying judgment-creditor jumps in priority ahead of the non-levying judgment-creditors even if it obtained the judgment earlier.  After levying on real property, the judgment creditor is then able to request that the sheriff list the property for sheriff sale. 

File Bankruptcy

If you have a judgment against you and are being subjected to debt collection efforts by a judgment-creditor, then bankruptcy may be a good avenue for you to pursue.  If the judgment-debt is discharged in a bankruptcy proceeding, then the debt is no longer owed.  However, it is important to contact an experienced bankruptcy practitioner to evaluate your options. 

Schedule a Free Bankruptcy Consultation Today!

Whether you need to completely eliminate your debt through Chapter 7 bankruptcy, or need to reorganize your credit payments through Chapter 13 or Chapter 11, we are well qualified as a full-service bankruptcy law firm for people in these and other New Jersey counties: Passaic County, Hudson County, Essex County, Bergen County, Morris County, and Sussex County. Call us today at 973-870-0434 or toll free 888-412-5091.

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