Our bankruptcy practice covers New Jersey as well as Pennsylvania. In the past we’ve already discussed being sued for debts in Pennsylvania. We thought it would be a good idea to cover New Jersey here on our blog as well.
Unlike Pennsylvania, New Jersey is not a kind and friendly place to be caught up in a debt collection lawsuit. As long as you earn more than $48 a week, creditors absolutely can receive a judgment which will allow your wages to be garnished. The results aren’t pretty.
- Your wages may be garnished up to 10% of your disposable income if you make up to 250% of the federal poverty level.
- If you make more than 250% of the federal poverty level your wages can be garnished up to 25%!
- New Jersey lets creditors attach 0.25% annual interest to delinquent debts.
- Employers get to deduct fees from the amount they send to the creditor, which means it will take even longer to pay off the debt.
- A judge can also order your bank account levied, which means creditors can seize funds directly from the account.
The Nest has a nice, in-depth layperson’s breakdown of wage garnishment in New Jersey. You can read it here.
See also: New Jersey Tops the Nation for Foreclosures.
Debt lawsuits are big business…in New Jersey and elsewhere.
In 2016 New Jersey courts processed 140,000 debt collection lawsuits. In 1996 the number was just 500. Debt buyers, who account for more cases in the US legal system than any other type of plaintiff, are the primary reason behind the surge. Sometimes, they’re collecting on debts which are well past the statute of limitations, offering a clean defense as long as you don’t do anything to restart the clock.
Nevertheless, collectors are making millions flooding the courts with these lawsuits. One private student loan company has been described creating a an assembly-line like process for producing legal filings—like making widgets. The process is so nasty and so scattershot at least one debtor was sued by two different companies over the same student loan.
In short, collection companies rarely have anything to lose by taking their shot. Meanwhile, you have plenty to lose if you don’t handle the lawsuit correctly.
The creditor isn’t always right.
You can get into trouble with lawsuits assuming there’s nothing you can do. Many debtors put their head in the sand, ignoring the Summons & Complaint. Nothing could be worse.
There are in fact a number of defenses a qualified attorney could make on your behalf:
- There’s some sort of a procedural error.
- You’re a victim of identity theft.
- You already paid the debt.
- The debt was already discharged through bankruptcy.
- The debt is past its statute of limitations.
- This collector has no right to sue.
Granted, if the problem is procedural the creditor will often fix the problem and come back for round two. All the same, it is possible to mount a successful defense against a debt collection lawsuit. It’s also possible to inspire the collection company to settle the debt for far less than they say you owe, a strategy which may save you thousands of dollars if there is no viable defense to use.
You only have a little time to respond.
In New Jersey you have just 35 days to respond to a creditor’s Summons & Complaint. If you don’t respond, or if you don’t respond properly, a judge can enter a summary judgement against you, and the case never even has to enter a courtroom.
The moment you get one of these complaints you should contact an attorney.
Trying to represent yourself pro se will not end well.
It’s typical for debtors to try to represent themselves in these lawsuits. Many debtors assume they can’t afford an attorney. Unfortunately, most debtors lose with this strategy. Meanwhile, hiring us can save you a lot more than you’ll spend. It’s better to work out a payment plan with our offices than it is to end up with 25% of your paycheck in a creditor’s pocket.
Remember, if you represent yourself in court you are expected to know everything a lawyer would know. The inequity between the creditor’s excellent legal team and a person who has never so much as cracked a law book open in the past can mean the case will be all but rubber-stamped in the creditor’s favor.
Bankruptcy may ultimately be your only option.
Bankruptcy is one method for stopping a debt collection lawsuit. The automatic stay will protect you. And by the time creditors start suing, you may be in a position which says you’ll never be able to pay off that debt.
The longer you wait the worse shape you’ll be in. Don’t let your emotions overcome you. Some debtors say “it’s my debt and I should pay it.” Admirable, but in some cases, thanks to interest, you’ve already paid two or three times what the debt was worth. Keep in mind your creditors use every legal loophole they can find to maximize their profits. Why shouldn’t you take advantage of a legal remedy to defend your ability to keep a roof over your head?
If you’re in trouble due to a creditor lawsuit, don’t delay. Contact Sadek and Cooper today for a free consultation. You need help right now. We can give it to you.