Collecting on Judgement
Having obtained a judgment against a debtor, a creditor cannot be content to sit on their rights and fail to investigate the collectability of that judgment. A judgment creditor can issue an information subpoena to a defendant which is a set of court approved questions to determine location of bank accounts, ownership of real estate, automobiles, and other substantial assets that a judgment defendant must answer under oath, otherwise they can be held in contempt. A judgment creditor can also take the formal deposition of a defendant and ask questions that relate to any property owned by the judgment defendant. If a judgment creditor knows of the existence of a bank account or unencumbered asset without the discovery methods, it is free to obtain a writ of execution from the Sheriff and direct the court officer to levy on the specific asset.
In the case of bank levies, the writ of execution freezes the bank account of the debtor and a second step known as a turnover motion is necessary to obtain an order compelling the bank to turn over the amounts in the bank account. Until the turnover motion is adjudicated, there is an opportunity for the defendant to object. If an objection is filed, no funds will be released util the court holds a hearing and determines the validity of any objection. Collection on a judgment can be a drawn-out and frustrating process for creditors who must persevere and continue to leave no stone unturned as to possible assets owned by the judgment defendant. Creditors should monitor the financial circumstances of the individual defendants.
A judgment that is seemingly uncollectible at the outset may be pursued at a later date once an individual has become gainfully employed or accumulates assets from other sources. It is possible to levy upon the wages of a employed judgment defendant through a wage execution process, but generally only a small percentage of the salary will be available to be paid in satisfaction of the claim. Furthermore, only one wage execution may be in place on a debtor’s wages at any one particular time. For these reasons, this is often not an effective collection method. If a defendant owns real estate with equity and is the sole title owner, the real estate can be sold and will satisfy those creditors in the priority under the Uniform Commercial Code and the Real Estate Law. There are also particular difficulties when a judgment defendant attempts to sell real estate owned jointly by husband and wife who have additional protection under the law.
Finally, if a business is owed account receivable from a third party source, there is a legal procedure known as a garnishee to intercept the amount that may be due by filing an appropriate motion. This collection action can be effective since judgment defendants are very often unaware that creditors have a right to execute against accounts receivable.
Does Bankruptcy Stop Judgment Creditor Writs of Execution?
After finding yourself in a significant amount of debt, the creditors to whom you owe can grow increasingly predatory the longer you cannot pay. Not only can this put a tremendous amount of stress on you, but it can also begin to negatively affect many different aspects of your life. Chapter 13 bankruptcy in New Jersey is intended to give a debtor a fresh start and shield them from the harassment and predatory practices of creditors who continue to try and collect the money they are owed.
As the situation continues to worsen, creditors will continue to attempt to collect on the judgment and will turn to increasingly severe and harassing measures to do so. Thankfully, after filing for Chapter 13 bankruptcy, the judgment of debt will be suspended, and a payment plan will be established to allow you to begin paying your debts and getting your life back on track without the constant pressure from creditors. Rather than liquidating assets at the hands of a Chapter 7 trustee, however, Chapter 13 sets forth a path for you to regain your financial freedom through other means.
A Collection of Judgment Lawyers in Somerville, NJ, is your best option when it comes to exploring your options as we advance. If it is decided that Chapter 13 is the path you would like to pursue, the rest of the procedures can be initialized, and the means test can be completed. Judgment Enforcement is no laughing matter and goes both ways between creditor and debtor. As soon as the plan is approved and you have completed the filing for Chapter 13 bankruptcy, the creditors will no longer be legally allowed to harass you or threaten other measures to collect their writs of execution.
Can A Judgment Be Enforced If I Was Not Notified Of It?
If a judgment has been made, it becomes a matter of public record and will affect the debtor’s ability to borrow money. Since the point has been made publicly known, there are very few situations in which not knowing the judgment can protect you from your creditors. Suppose the debtor refuses to cooperate and makes an effort to communicate with the creditor and repay their debt. In that case, the creditor now has the legal right to begin taking more severe measures to regain the money they have lent.
Judgment Enforcement can come in many forms, and it is best that as soon as you are aware of a judgment made against the debtor to retain the services of a Collection of Judgment Lawyer. Options available to collect the debt are a writ of execution and asset searches that give the creditor a clear picture of the resources the debtor has available. To better explore the ways in which you may wish to proceed, it is essential to act quickly. Call Michael McLaughlin, LLC, as soon as possible to schedule an initial consultation and to discuss the details of the situation on which you have found yourself. From there, we will collaborate to determine which options available to you will be most beneficial.
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