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Creditor’s rights is a generic term describing a remedy that a company who lends money or extends credit to an individual or business can enforce. A creditor may have a right to proceed to enforce a contract to repossess collateral posted as security for a loan. The contract could contain terms other for payment of a debt. It might include a provision that would allow for an injunction against a company that attempts to compete with another company.

A landlord will have specific remedies in the event that someone defaults on the terms of their lease. Those rights would include eviction, suing guarantors on a lease, and to obtain a judgment for the amount of unpaid rent. Essentially, creditor’s rights are the stipulated terms negotiated between the parties in their contract, not only while the agreement is a performing loan or obligation, but also those rights that may arise on default of one of the parties.

What Is The Statute Of Limitations On Collecting A Debt In New Jersey?

The general statute of limitations in New Jersey on debt collection is six years. On mortgages, it can be 20 years. The purpose of the statute of limitations is to prevent stale claims, where documentation can become lost, documentation is not maintained, and witnesses’ memories become stale. After that expiration of a period of time, a creditor who has not actively pursued their rights will be forever barred from asserting those rights against the responsible party.

Can A Creditor Garnish A Debtor’s Wages?

A creditor who has a judgment can garnish a debtor’s wages. That is done through a process known as an application for a wage execution. The wage execution becomes an avenue to collect the debt through payroll deductions, monthly, from the individual’s earned pay. The percentage of pay that is subject to a wage execution in New Jersey is very low. It is roughly 10% but can be lower in certain situations. In a wage execution, the debtor receives notice of the wage execution, their employer receives notice of the wage execution, The debtor has an opportunity to object, if they make below a certain minimum wage.

If there is no opposition and the wage execution is granted, there will be an order entering the wage execution will allow for periodic payroll deductions from the individual’s earnings as they become due. One significant aspect of wage executions under New Jersey law permits only one wage execution to be in place at a particular time. While one wage execution is being paid, a second creditor has no legal authority to impose another wage execution against that individual.

What Is A Third-Party Citation To Discover Assets?

In New Jersey, the creditor, once they obtain a judgment, can also proceed to collect on that judgment by trying to discover assets through other avenues, including serving an information subpoena on a defendant. The information subpoena is an approved set of form questions primarily designed to have a debtor respond, under oath. An example of some questions is: Where do they work? What do they earn? Do they own cars? Where do they bank? Does anyone owe them money? Questions such as these have to be responded to, under oath, within 14 days of service. If a debtor fails to return the information subpoena within 14 days, the creditor has rights to move for relief, including a motion to compel the response. The information subpoena is one tool that is used by creditors to discover assets that can be levied upon through the judgment execution process.

What Is The Difference Between Using A Debt Collection Agency And An Experienced Attorney To Collect Debt?

Debt collection agencies are generally quite good at smaller claims that are not disputed. However, the larger the claim, the more it tends to be a situation where there might be an underlying legal or contractual issue that is not going to be resolved through the informal debt collection process. Very often, the issues in a contract dispute can’t be compromised because the parties need to analyze their legal rights and obligations. A complete analysis will not occur unless an attorney gets involved in the process. A legal interpretation may conclude that some aspect of the dispute is legitimate and result in a compromise on the debt. It can be very difficult to persuade a debt collection agency to recognize the validity of a legal issue.

Get Information on Creditor’s Rights In The State Of NJ, or call the Michael McLaughlin, LLC, for an initial consultation at (908) 373-8500 and get the legal answers you are seeking.

Michael McLaughlin, Esq.

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(908) 373-8500

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